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La Rinascente Attracts Many Potential Bidders

MILAN — With its prestigious real estate and name — La Rinascente SpA is one of Italy’s best-known properties and investment funds — entrepreneurs and property companies are lining up to buy the group after its owner, Eurofind,...

MILAN — With its prestigious real estate and name — La Rinascente SpA is one of Italy’s best-known properties and investment funds — entrepreneurs and property companies are lining up to buy the group after its owner, Eurofind, put it on the block last month.

Eurofind, which has tapped Lazard as an adviser, is a joint venture between Ifil, an investment company controlled by the Agnelli family, and French retailer Auchan. “The group is no longer strategic for the owners,” said one analyst here. “Ifil is looking to raise cash to invest into its automaking business, Fiat.”

Sources here say the suitors include Simon Property Group Inc. and the investment fund The Carlyle Group of the U.S.; equity fund Bain Capital; Villa Moda owner Majed Al Sabah; Dubai Investment Co.; real estate company Aedes, which last year created a real estate spin-off with Prada; property company Beni Stabili, which acquired part of Prada’s real estate space earlier this year, and Pirelli Real Estate together with Deutsche Bank.

None of the potential bidders could be reached for comment on Wednesday. But a bid from Simon Property Group would make sense since at the end of 2003, the Indianapolis-based company formed a joint venture with La Rinascente Group to own, manage and develop shopping malls in Italy. That deal, said the Rinascente spokesman, is limited to the food division. Last September, Eurofind split the Rinascente Group into two divisions — La Rinascente SpA and Societa Italiana Distribuzione Moderna, which comprises the food division and was sold to Auchan.

The sale, according to the Rinascente spokesman, should be completed by the first half of 2005.

La Rinascente SpA includes real estate properties; the midtier Rinascente department stores, which also carry designer diffusion lines, and the Upim mass market business. Sources here estimate that the group is valued at between 600 million and 800 million euros, or $780 million and $1 billion at current exchange rates.

There are 18 Rinascente stores and 148 Upim stores in Italy.

In 2003, La Rinascente stores reported sales of 310 million euros, or $403 million. The Upim stores registered sales of 573 million euros, or $744.9 million, last year. “La Rinascente is the only department store of this level in Italy; it is number one, although its structure is not homogeneous,” said Armando  Branchini, a luxury goods consultant here.

The Rinascente stores, for example, range from a highly prestigious space in Milan, just off the city’s main cathedral, to Rome’s Via del Corso space to locations in other cities that are not as prominent, according to Branchini. “It is a highly desirable group, as it also offers something for all, since Upim includes hundreds of points of sale at a more mass market level,” he said.

The first La Rinascente store opened in Milan in 1917, but, with a different name. It is well known that Giorgio Armani was a window-dresser for the store in Milan before he launched his namesake brand, and that La Rinascente helped jump-start the Missoni label, when, in 1958, Ottavio and Rosita Missoni produced their first striped shirtdress for the store.