Diego Della Valle, the founder of luxury shoemaker Tod’s, is making a move to take the company private after it has been listed on the Milan Stock Exchange for two decades. Della Valle plans to invest around €338 million ($344 million) to buy out other investors in order to revive the brand and bring it back to its former glory.

Della Valle’s family holding company, which he shares with his brother, will pay €40 for each Tod’s share. This offer represents a 20.4% premium to the stock’s closing price on Tuesday and values Tod’s at approximately €1.32 billion. Interestingly, this price is the same as the one set during Tod’s initial public offering in 2000.

Like many Italian luxury brands known for their craftsmanship, Tod’s has faced difficulties in attracting younger luxury shoppers in recent years. In 2017, the company launched a strategy to revamp its brands, but those efforts were hampered by the COVID-19 pandemic. However, Tod’s showed signs of recovery last year, with group sales increasing by almost 40% after five years of consecutive declines.

Della Valle has stated that the main objective of delisting Tod’s is to enhance the value of each individual brand within the group. By giving more visibility and operational autonomy to each brand, Tod’s aims to strengthen their positions in the quality and luxury market. Being delisted will also enable Tod’s to focus on long-term growth without being solely judged on short-term results.

Currently, Della Valle and his brother hold a 64.45% stake in Tod’s and will launch a bid to acquire an additional 25.55% of the company’s shares through their joint holding company, DeVa Finance S.r.l. The remaining 10% of shares is held by Delphine SAS, a subsidiary of the LVMH Group, which has agreed to maintain its stake and remain a shareholder in the delisted group.

In recent years, Tod’s stock has performed poorly compared to its luxury peers. While Tod’s shares have declined by 32% year-to-date, French luxury conglomerate LVMH and Italian brand Salvatore Ferragamo have experienced smaller declines of 7% and 25% respectively.

BNP Paribas, Crédit Agricole Corporate Investment Bank, and Deutsche Bank are acting as financial advisers for the bid and are providing financing, while BonelliErede is serving as a legal consultant. The delisting offer is expected to mark a new chapter for Tod’s, allowing the company to focus on revitalizing its brands and once again capturing the attention of the luxury market.

Useful links:

1. Tod’s official website
2. Forbes article on Tod’s delisting bid