FABIO COVARRUBIAS RESURFACES WITH A NEW BID FOR GFT SPA
Byline: SARA GAY FORDEN
MILAN — Mexican entrepreneur Fabio Covarrubias has reemerged with a new bid for GFT SpA, according to banking sources here.
Covarrubias was reported to be traveling and unreachable for comment, and a Covarrubias spokesman in Milan said he was unable to confirm or deny the news.
As reported, Covarrubias — who has interests in businesses ranging from finance to textiles to fertilizer — had been on the brink of buying GFT this year. He withdrew his initial offer in March after Plaid Clothing Group PLC came in with a higher bid at the last minute and was given an exclusive to negotiate for GFT.
“Covarrubias had never abandoned the idea of GFT,” said one source familiar with the situation. “Clearly, he was waiting for Plaid’s exclusive to expire,” the source said.
The banking sources said that the Covarrubias Group outlined an offer this week to GFT’s seven leading creditor banks. The offer reportedly is somewhat higher than the $250 million (390 billion lire) price set between Plaid and the GFT creditor banks that essentially hold GFT. However, details of the reported Covarrubias bid was being kept under wraps.
A spokesman in Milan for Morgan Grenfell, the merchant bank that represented Covarrubias in his first bid, said he didn’t know anything about the latest Covarrubias offer.
GFT officials weren’t available for comment, nor were officers at the leading Italian creditor banks. A spokesman for Milan merchant bank Mediobanca, which is masterminding the GFT financial rescue plan, declined to comment.
As reported, Plaid’s exclusive to acquire GFT expired on July 15, although sources familiar with the negotiations have said the acquisition is proceeding and that a contract agreement could be signed as soon as the end of the month.
Meanwhile, in a separate development, GFT announced that it has renewed up to the year 2000 its accord with Valentino to produce and distribute the Valentino Boutique women’s ready-to-wear line, the Miss V diffusion line, and the Valentino Uomo diffusion line.
Geographically, the accord covers the entire world with the exception of Central and South America. In addition, starting with the fall-winter 1995 season, GFT will also produce the Oliver men’s wear line, which is currently produced by Staff International. The Oliver women’s line is still produced by PAG SpA.
GFT’s annual wholesale volume from the Valentino lines is $160.3 million (250 billion lire), both companies confirmed.Valentino chief executive officer Giancarlo Giammetti said in a telephone interview that the fashion house, in mutual agreement with GFT, will place its top men’s line, Valentino Couture, with another, still-to-be-decided, manufacturer.
“It was a mutual decision based on the things that GFT
can do best, which is to develop and follow a volume business,” said Giammetti. “We will be giving the men’s couture line to another manufacturer that will be more able to develop that end of the business,” Giammetti continued.
In addition, Valentino has reacquired the outstanding 50 percent stake in its U.S. company Valentino Couture Inc. from GFT for an undisclosed sum. This gives Valentino complete control over the U.S. unit, which holds the Valentino trademarks for the U.S. and Canada.
With regard to GFT’s future ownership, Giammetti — who said he was not aware of the Covarrubias bid — said Valentino has given its approval to an acquisition by Plaid on the condition that there is to be no reduction in the royalties, and that no special terms are to be introduced into the contract.
Further on the decision to renew the Valentino/GFT contract, Giammetti commented, “This new agreement is enormously satisfactory to both parties. The volume we bring to GFT is proof of the power of the designer business with GFT.”
Giammetti also noted that the chairman of Plaid, Omar Al Askari had personally sought him out on more than one occasionin the recent past, “which is testimony to the fact that Valentino is seen by Plaid as a crucial factor in the agreement.”
GFT’s stable of top designers for women’s apparel includes, among others Giorgio Armani, Claude Montana, Emanuel Ungaro.
For men’s wear, GFT’s list of designers includes Calvin Klein, in addition to Valentino.
— Fairchild News Service