Financial News

  • 5 February 2014, 9:12

Blackstone Plays China Card In Versace Race

A trio of private equity firms will submit final offers on Wednesday for one of the international catwalk's biggest prizes: a minority stake in the Italian fashion house Versace.

Sky News has learnt that Blackstone, one of the remaining bidders, has placed its access and network in China at the heart of its bid amid a tussle between the three firms to secure the prestigious deal.

Blackstone is 10%-owned by China Investment Corporation, the country's sovereign wealth fund, and the US buyout group is understood to be pitching its connections there as an important element of the value it could generate by becoming Versace's preferred investor.

Competing against Blackstone are Investcorp and CCMP Capital, a firm previously owned by JP Morgan, the giant Wall Street bank. Bids are due on Wednesday, with an investor expected to be chosen within days.

People close to the process said the three bidders were likely to be in broadly the same range in terms of the economic value of their offers, which will value Versace at roughly £850m including debt, and that other factors were likely to play a decisive role.

Bahrain-based Investcorp is understood to be particularly bullish about the value of Versace and its prospects, a source said.

The group's creative direction is overseen by Donatella Versace, the younger sister of Gianni, who was shot dead in 1997. She  owns 20% of the company and is playing a leading role in the negotiations over the stake sale.

The largest shareholder in the company, Allegra Versace, is understood to be open to the idea of a stock market listing in Milan in 2016 or later.

Closely-held Italian companies such as Versace have been forced to open themselves up to external investment by the long stagnation in Italy's economy.

Versace was itself close to going under when Gian Giacomo Ferraris joined as chief executive from Jill Sander in 2009.

The private equity bidders all have experience of investing in luxury goods. One of CCMP's senior advisers, Robert Singer, is already a board member at Versace, which recorded sales of nearly £400m last year.

None of the firms shortlisted for the Versace stake would comment on the process.

Goldman Sachs, which is overseeing the stake sale on behalf of the Italian fashion house, also refused to comment.