Arnault’s hand on Italian luxury. LVMH’s entry into the capital structure of Moncler demonstrates the expansionist aims of the luxury king, who doesn’t limit itself to using its holding company, but that also applies pressure via L Catterton, which controls Etro and the beauty brand Kiko Milano and practically has Tod’s in its pocket. Moncler, on the other hand, defends itself against Blackrock with this move and increases its marketcap by 1.5 billion in a single stock market session.
Arnault’s hand
LVMH has a market capitalization of more than 338 billion euros and the financial strength to expand its portfolio (which already includes more than 75 brands). L Catterton has made more than 250 investments in consumer brands since its launch in 1989 and currently manages assets for $34 billion. That’s the kind of impressive firepower that puts Bernard Arnault (in photo on the left) in the position of being able to buy what he wants (or almost what he wants). He just has to choose the most profitable investments.
Moncler strengthens itself
While downgrades on Moncler were pouring in from banks, Arnault struck a deal with owner Remo Ruffini (in photo on the right). According to Citi, LVMH now holds about 1.6% of Moncler and acquires the right to appoint two members to Double R’s board of directors and one member to Moncler’s board of directors. By signing the agreement, the French will underwrite a capital increment to get cash flowing into Double R, so as to finance the stock market shopping of Moncler shares. Given today’s values, analysts believe LVMH could underwrite a transaction for more than 400 million, writes Borsa Italiana.
The comments
“I don’t think the transaction is limited to strengthening Moncler. Surely it’s only the first step of a more complex project, the fullest extent of which we do not know – say the comments collected by Borsa Italiana -. I do not think LVMH’s move aims to protect Moncler from takeovers. The brand is interesting above all because it is led by an outlier”. On the other hand, Bebeez claims that, with this move, Ruffini is defending himself from Blackrock, which a few days ago was found to hold more than 5% of Moncler. Others claim that Arnault has used this move to defend his brand from Kering.
Capital
And so, Arnault now also has an interest in Moncler, with a strategy that retraces the one carried out in Tod’s. First the purchase of 10% of the share capital, then the pact for delisting with Diego Della Valle. The Marche-based entrepreneur, on the other hand, had said on several occasions, “If I was to sell, I would sell to the Arnaults“. What will be LVMH’s next target? There has been talk of a courtship (rejected) towards Richemont. Given the size of Italian companies, Arnault could gobble them all up in one go. LVMH’s boss may not be in a hurry, but slowly…
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