Italian billionaire Leonardo Maria Del Vecchio's siblings reject his $33 billion offer

Italian billionaire Leonardo Maria Del Vecchio's bid to take control of his family's €29.6 billion ($33.2 billion) holding company has been rejected by four of his siblings, days after a Czech billionaire made a rival offer for the same company.

Rocco Basilico, Paola Del Vecchio, Luca Del Vecchio and Clemente Del Vecchio told him in a joint letter that they were not interested in considering or discussing the proposal. Each of the four owns 12.5% of Delfin, the Luxembourg-based company through which the heirs of Luxottica founder Leonardo Del Vecchio control 32.4% of EssilorLuxottica SA, the maker of Ray-Ban and Oakley sunglasses.

Together the four hold half of Delfin, which leaves the offer with no path to the majority Del Vecchio was seeking.

The offer

Del Vecchio, 31, made the approach through his investment company, LMDV Capital, in a letter to the other shareholders. He offered about €3.7 billion ($4.1 billion) for each 12.5% stake and said he wanted to end up with between 62.5% and 87.5% of Delfin, which means buying at least four of the seven other stakes. Including his own holding and that of his mother, Nicoletta Zampillo, the offer valued the whole company at about €29.6 billion.

The price was based on Delfin's net asset value, the market worth of its holdings, minus a 30% discount, the same method used in the rival bid. Citigroup Inc. gave a non-binding letter saying it was highly confident it could arrange up to €22 billion ($24.6 billion) of financing. The letter to the heirs referred only to "a leading international credit institution."

Relatives could take cash, or 30% in cash up front and the remaining 70% in EssilorLuxottica shares after 12 to 14 months. Those who chose to stay in would sign a shareholder agreement covering strategy, board seats and dividends, with an exit at a set time and price. Del Vecchio also promised stricter governance written into binding bylaws and two independent directors with a binding say on major decisions. He asked for 30 days for the heirs to accept and 60 days of exclusive talks to draft the agreements, and invited them to meet him by Nov. 7.

He called it "the most serious" proposal he had ever made and said the family's situation "has attracted the interest of outside parties." In earlier statements he has said his aim is to keep Delfin and its stakes in Italian banks and insurers in Italian hands.

Zampillo, Claudio Del Vecchio and Marisa Del Vecchio did not sign the rejection letter. Delfin, which is chaired by EssilorLuxottica Chief Executive Officer Francesco Milleri, has not commented.

A rival Czech bid

The same four heirs had already turned down an approach from Czech billionaire Michal Strnad, the owner of ammunition and military vehicle maker Czechoslovak Group. In a letter dated Oct. 20, Strnad offered about €30 billion ($33.6 billion) for all of Delfin, on the condition that its bylaws be changed to drop a rule limiting ownership to Del Vecchio's heirs. That change needs the backing of 88% of the capital, so any single heir can block it.

Delfin's main asset is its EssilorLuxottica stake. EssilorLuxottica closed at €186.90 on Oct. 30, giving the Paris-listed company a market value of about €87.5 billion ($98 billion). Delfin also owns about 10% of insurer Assicurazioni Generali SpA, about 17.5% of Banca Monte dei Paschi di Siena SpA and a small stake in UniCredit SpA. Its listed holdings are worth about €43 billion ($48.2 billion).

A long family fight

The founder's estate was split equally among eight heirs when he died in June 2022, and they have yet to agree on the company's future. Leonardo Maria has tried for most of this year to raise his stake. A €10 billion plan to buy the holdings of Paola and Luca fell apart this summer after Delfin's board refused to provide a letter of support his company had requested. The two siblings have since demanded €500 million ($560 million) in penalties from his company under that agreement. In October, Basilico, his half-brother, rejected a €3.5 billion offer for his stake.

Leonardo Maria is the son of Leonardo Del Vecchio and Zampillo. He stepped down as chairman of Ray-Ban and as EssilorLuxottica's chief strategy officer at the end of August. Through LMDV Capital he controls Editoriale Nazionale, publisher of the QN Quotidiano Nazionale group of newspapers, owns 30% of the publisher of Milan daily Il Giornale and has invested in hotels, restaurants, the Twiga beach club and the spa town of Fiuggi. Forbes put his fortune at $7.5 billion last December.

Figures were converted at $1.12 to the euro.