Tod’s is attempting to re-enter the market with a second public tender offer (PTO) after the failure of the first attempt in 2022, with a price per share of €40.00, not reaching the threshold set at 90%, forcing the group to withdraw the offer.
The Della Valle brothers, Diego and Andrea, try again, supported by the private equity fund, L Catterton, participated by LVMH, on a percentage of 36% of Tod’s share’s, with the intention of obtaining delisting.
The consequence of delisting is that the company will no longer be listed on Borsa Italiana S.p.A. and Tod’s ordinary shares will no longer be publicly traded on the Euronext Milan (EXM) segment.
This move by Tod’s is not an isolated case, but rather, represents a trend of many companies showing this tendency to leave the Italian market, considering that in 2023, 24 cases of delisting were recorded.
Tod’s stated that delisting was a choice to favor long-term growth and strengthening due to greater flexibility, however, analyzing the market, we can also highlight other motivations that drive companies to opt for delisting: investors are increasingly interested in technology stocks, the administrative complexity associated with the status of a listed company can be an obstacle to listing and staying on the stock exchange; and also, legislative regulations can constitute another significant obstacle.
In case of the PTO’s success, the shareholding will undergo changes: the Della Valle Family would remain the main shareholder, but their stake would decrease from 64% to 54%, 26% of the outstanding shares would be acquired by the L Catterton fund, bringing its stake to 36%, while the LVMH group would retain 10% of the shares.
The price per share set for the PTO is €43.00, with a premium of 17.5% over Friday’s closing price and 20.5% over the average of the last 12 months. The total value of the operation is estimated at €512 billion.
Tod’s decision to exit the stock market is noteworthy, considering it was the first company in the luxury fashion sector to be listed on Piazza Affari, it was precisely because of this listing that the group managed to become one of the few “billion companies” in Italy in the sector.
This situation raises questions about the resilience of companies, Italian and otherwise, in deciding to be listed on the stock exchange. The number of relevant delisting cases is significant, as are the numerous cases where companies choose to remain private and not go public. This phenomenon seems to represent a growing trend, but it remains to be seen whether this will lead to a situation where being listed on the stock exchange or remaining in the stock market will offer more advantages than delisting or choosing not to go public at all.
Author: Sabrina Ramdohur