Cavalli close to majority stake sell-off to VTB Capital for €500m – report

Italian designer Roberto Cavalli is said to be close to signing a deal to sell 60% of his signature fashion house to VTB Capital, part of Russian investment bank VTB Group, for €500m ($667.5m), valuing the brand at €830m, according to WWD. As of late Sunday, talks between Cavalli and VTB were still going on, according to sources. They said the designer, who has cut his vacation to return to Milan for the talks, is eager to complete a deal.

One stumbling block is a governance issue and how that would impact the role of Cavalli’s wife, Eva, who helps him design the collections, the sources said.

The sale is expected to close in October.

If a deal is completed, it would end the long-running saga of Cavalli searching for an investor, which began more than five years ago with talks with private equity firm Clessidra SGR. At the time, the designer was in discussions to sell a 30% stake in his firm, but the talks broke down over price.

Cavalli went back on the hunt for an investor earlier this year. Private equity fund Permira was interested in acquiring the entire company but, again, talks broke down over valuation. Sources said Permira recently re-entered the picture, but VTB Capital edged it out.

In January, Cavalli reported 2013 unaudited ebitda which are expected to represent 11.2% of total revenues. Sales in the fiscal year ended Dec. 31 grew 9.3% to €201m. The company has not reported results for the first half of 2014.

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