Czech arms-industry billionaire Michal Strnad has offered about EUR30 billion in cash for Delfin, the holding company through which the heirs of Luxottica founder Leonardo Del Vecchio control a third of eyewear maker EssilorLuxottica, but the family has so far shown little interest in selling.
The proposal, set out in a letter dated Oct. 20 from Tilaris, the vehicle that oversees Strnad’s holdings outside defense, became public this week. It is valid for 30 days. The price is calculated as Delfin’s net asset value minus a discount of about 30%, and Strnad has said he would also be willing to buy a 62.5% controlling interest, equal to five of the eight family shares, if a full sale isn’t possible.
A prize portfolio
Luxembourg-based Delfin owns roughly 32% of Paris-listed EssilorLuxottica, about 10% of insurer Generali, close to 18% of Monte dei Paschi di Siena, a smaller stake in UniCredit and a large holding in real-estate group Covivio. Estimates of the portfolio’s market value range from about EUR40 billion to EUR43 billion. Because Delfin holds more than 30% of EssilorLuxottica, a change of control at the holding company could raise questions under French rules about a follow-on offer for the listed group, though such an outcome is seen as remote.
Strnad, 34, controls Czechoslovak Group, the ammunition and military-vehicle maker that listed in Amsterdam in January. He bought a 14% stake in tire maker Pirelli earlier this year and owns Italian ammunition maker Fiocchi.
Heirs push back
Delfin’s ownership is split equally among the founder’s widow, his six children and his widow’s son, and its bylaws require an 88% vote to admit an outside shareholder, which in practice means unanimity. Shareholders have individually told the company they consider the offer unacceptable, largely because a buyer seeking control would normally pay a premium rather than a discount. Leonardo Maria Del Vecchio publicly said his father’s life’s work should remain part of Italy’s heritage. Delfin declined to comment.
The bid lands as the holding company studies buying back up to a quarter of its own capital so that some heirs can exit, a plan for which it has opened talks with banks. Strnad wrote that his proposal and the buyback were compatible.
