By  on July 3, 2007

MILAN — Private equity group Permira is finalizing the terms of its summer takeover bid for Valentino Fashion Group SpA.

On Monday, Permira's new company Red & Black Lux Sarl sent a detailed summary of its takeover offer to Consob, Italy's stock market regulator. Pending regulatory approval, the tender offer could start as early as the last week of July and finish in the first week of September, Red & Black said in the document.

Permira already has secured majority control of VFG through a series of deals with members of the Marzotto family. Now the private equity fund is looking to buy out minority shareholders and ultimately delist VFG from the Milan stock exchange.

Red & Black is offering 35 euros per VFG share, or $47.41 at current exchange. The document specifies that the price represents a premium of 23.1 percent on the share's average closing price over a 12-month period ending June 1, the date Permira announced its offer.

In May, Permira's Red & Black bought 29.62 percent of VFG from Marzotto family holding company International Capital Growth Sarl. In June, Red & Black struck two more deals to buy more shares from other members of the Marzotto family. Those shares haven't changed hands yet because the deal has not yet received regulatory approval, a Permira spokeswoman said Monday. Once those transactions are complete, Permira will hold nearly 54 percent of VFG.

Red & Black's total price tag for VFG, should all shareholders accept its offer, will be about 2.6 billion euros, or $3.52 billion. But the expenses won't stop there. As reported, Red & Black will also launch a cascading bid for all outstanding shares in Hugo Boss AG. VFG owns 50.9 percent of Hugo Boss, which is listed on the Frankfurt Stock Exchange.

Monday's document did not list the terms or timing of the Hugo Boss tender. On June 1, Red & Black said its price for Hugo Boss would equal the shares' average trading prices over a three-month period. At current market prices, buying out all minority shareholders in Hugo Boss would cost Permira about 1.6 billion euros, or $2.2 billion.Permira has yet to outline its business plan for VFG and the fund's executives are declining requests for interviews. Meanwhile, Canova Partecipazioni Srl, the holding company of VFG chairman Antonio Favrin, still owns nearly 20 percent of VFG, and hasn't said whether or not it would sell its stake. On Monday, a Canova spokeswoman said the company was weighing its options.

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