Russia's VTB Capital in talks for Cavalli stake

Amy King
13 August 2014

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VTB Capital, the investment arm of Russian lender VTB Bank, is in talks to take a majority stake in Italian fashion brand Cavalli, according to reports.

According to the Russian press, the buyer could bid up to €500m for a 60% stake in the business, valuing the firm at more than 20x EBITDA.

Negotiations are reported to have begun at the beginning of the summer. Prior to that, Permira was thought to have circled the asset.

The company is owned by eponymous designer Roberto Cavalli, though a partnership with a private equity owner, including Permira, has been considered in the past.

A number of GPs expressed an interest in the asset in 2008, when players including Cinven, Carlyle, Clessidra and Permira were reported to be circling the firm as part of an auction process organised by Merrill Lynch.

In June 2009, Roberto Cavalli signed a letter of intent to sell a 30% stake in the firm to Clessidra. However, discussions ground to a halt over the summer due to pricing disagreements. Estimates at the time speculated that the deal could be valued at €100m, putting the enterprise value at around €300m (around 9x EBITDA) – a significant discount from what the designer had initially quoted as an asking price.