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Madrid
Private equity firm CVC Thursday announced
that it was launching an agreed takeover bid for Cortefiel
that values the Spanish clothing retailer at about €1.4
billion.
Through its instrumental company, Coral
Retail Industries, CVC said in a statement to the Spanish
National Securities Commission (CNMV) that it was offering
to fully acquire Cortefiel at €17.90 per share. That represented
a 12-percent premium to Cortefiel's closing price in the
Madrid stock exchange on Wednesday of E 15.96. After trading
in the stock was temporarily suspended, Cortefiel closed
yesterday up 16.23 percent at
€18.55. Prior to the offer, the company's
share price had already appreciated by over 37 percent
so far this year.
The Hinojosa family, which started up
the business, has agreed to sell its 55.74-percent direct
and indirect holdings in Cortefiel. The offer, which is
open for 45 days, is conditional on acceptances from shareholders
holding a minimum of 75 percent of the company. According
to the CNMV's website, investment company Hidasa holds
10.23 percent of Cortefiel, with the rest of the company's
capital in free float on the stock market. The business
was listed in the Madrid exchange 10 years ago.
Counterbid opt-out
The offer by Coral Retail allows Cortefiel's shareholders
the option of accepting a counterbid launched during the
bid period provided that is at least 8 percent above its
own offer, that is above €19.33 per share.
Analysts said Cortefiel may well attract
other bidders. Coral Retail's offer is below the current
market value of rival clothing retailers such as Inditex
in Spain.
Cortefiel more than doubled its net profit
in the financial year to February to €62.24 million, as
sales rose 5.4 percent to €971.27 million. At the end
of February, the group had 1,100 directly-managed and
franchised retail outlets under a number of different
brand names in 37 countries. In the current financial
year it plans to open a further 200 sales points, of which
86 will be directly managed shops.
Spanish companies have been a major target
for private equity firms over the past year. BC Partners
and Cinven recently brokered a buy-out bid for Madrid-based
global tourist reservation company Amadeus with its reference
shareholders Iberia, Lufthansa and Air France. Advent
International failed to acquire airport retail store operator
Aldeasa after it was outbid by Italy's Autogrill. Earlier
this year, CVC denied reports that it was preparing a
takeover bid for Spanish electricity firm Unión
Fenosa.
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