RIVETTI IS SAID TO BE THE EMERGING LEADER IN GFT BIDDING WARS
Byline: Sara Gay Forden
MILAN — A full-fledged bidding war, as predicted, is under way for GFT SpA, and an investor group lined up by GFT chairman and former owner Marco Rivetti is said to have emerged as a formidable candidate.
Sources familiar with the talks said Monday that GFT’s creditor banks reportedly have turned up their nose yet again at an offer from Plaid Clothing Group PLC. Although no official announcements have been made, financial sources said Monday that the banks have
essentially rejected what Plaid designated as its “final” offer of $274.1 million (430 billion lire). Plaid, which asked for an answer by today, may not yet have been officially notified, however, the sources said. Plaid officials weren’t immediately available for comment here or in the U.S.
After a meeting of GFT’s creditor banks Monday, Milan merchant bank Mediobanca, which is coordinating the process of selling GFT, has invited other bidders to perfect their offers over the next week. Another meeting of the creditor banks has been scheduled for next Monday to review the new offers, the sources said.
At the same time, the reported initiative by Rivetti is gaining credibility within certain trade circles here, particularly those close to GFT, as the potential front-runner, given Rivetti’s historical ties with the company and current sway in the Italian financial/industrial community.
According to the sources, Rivetti has returned triumphant from a whirlwind tour of the U.S. to gather allies in a bid to reacquire control of his family manufacturing empire, which he lost last year when it fell into the hands of the banks. The sources said he has secured an agreement from the Apollo Advisors, a U.S. leveraged-buyout fund headed by Leon Black, to present an offer. Rivetti could not be reached for comment, and phone calls to Black’s office in New York were not returned by press time.
“I am convinced that the horse that’s running for Marco Rivetti is going to win this race,” said a source close to GFT.
The reopening of the gate to potential bidders “clearly means it is going to be too late to close this deal before yearend,” said one source. Even if a deal is made before the end of December, the technical procedures and antitrust approvals required for a closing would be difficult, if not impossible, to conclude in such a tight time frame.
The first revised proposal openly on the table is from CVC Capital Partners, the venture capital firm associated with the Citibank financial group. According to a spokesman, CVC, which also claims to have agreements with Giorgio Armani — one of the key designers for whom GFT manufactures — and former GFT managing director Clemente Signoroni (although these appear a little shaky, according to sources), has upped its bid to $306 million (480 billion lire), contingent on the completion of due diligence, which it estimates will take about four weeks.
According to sources, CVC late Friday raised its initial bid of $274.1 million (430 billion lire) to $290 million (455 billion lire) late Friday, and then jacked it higher over the weekend.
“They ended up outbidding themselves,” one source commented.
Meanwhile, a spokesman for Texas Pacific Group, the U.S. LBO fund that engineered the buyout of Continental Airlines and America West, confirmed it has upped its bid to $280 million (440 billion lire) from $253.1 million (397 billion lire).
Texas Pacific, which presented an independent bid, has made an agreement with former bidder, Mexican entrepreneur Fabio Covarrubias, for the due diligence he completed in his first effort to buy GFT earlier this year.
“At this point, we would only need to update the diligence, and we are confident we could close this deal by the end of the year,” the spokesman said. He noted, however, that the Texas Pacific bid expires midnight Nov. 20.
“We aren’t going to wait around forever,” he said.
In addition to Rivetti, there are other new bidders in the picture, the sources said, although it wasn’t immediately possible to confirm these offers. One is from an Italian electronics firm Tecnicomp, formerly of the Olivetti group, which has reportedly made the highest bid to date. According to sources, Tecnicomp has offered the equivalent of some $337.8 million (about 530 billion lire) by proposing to buy the options in GFT currently held by the creditor banks, but would leave the debt intact.
Finally, rumors were also intensifying that Fiat investment group Gemina SpA, or its sportswear subsidiary Fila SpA, would present a bid before the Monday deadline.
“I don’t know anything new,” said a Gemina spokeswoman, who has repeatedly denied any Gemina interest in the past.
Needless to say, the confusion surrounding the sale of GFT was escalating rather than diminishing, following the meeting of GFT’s creditor banks Monday.
“I have never seen anything like this,” said one source, after Monday’s meeting of the creditor banks. Another added, “In my view, they haven’t really decided who to sell it to, and by ‘they,’ I mean Mediobanca.”
— Fairchild News Service