French group Kering, which owns Gucci, Saint Laurent and Balenciaga, has postponed a full buyout of Valentino until at least 2028, changing the terms of its shareholder agreement with Qatari fund Mayhoola. The decision came amid Kering's high debt load and was the first major move by the company's new CEO Luca de Meo.
Details
Kering said Sept. 10 that it will not fully buy Italian fashion house Valentino from Qatari fund Mayhoola until at least 2028. The companies' original shareholder agreement was signed in 2023, when Kering acquired a 30% stake in Valentino. The deal envisioned that the Gucci owner would be able to fully acquire Valentino by 2026-2028. The timeline has now been postponed: Mayhoola will only be able to sell the remaining 70% stake in 2028-2029, and Kering itself will only be able to exercise its right to a full takeover in 2029.
This is Kering's first major move under new CEO Luca de Meo, Reuters notes. The company's commitment to fully buy the business from a Qatari investment fund has been weighing heavily on the debt-burdened French luxury group. Kering's net debt at the end of the year is 8.9 billion euros ($10.5 billion), excluding lease obligations, Bloomberg reports, citing calculations by HSBC analyst Erwan Rambour. This is 3.3 times the company's projected 2025 earnings before interest, taxes and amortization.
What about the stock
At the end of trading on September 10, the value of Kering securities in Paris almost did not change. Since the beginning of the year the market value of the company has fallen by 2%.
Only four of the 23 analysts tracking Kering are now advising investors to buy the stock (Buy and Outperform ratings), according to MarketScreener. Five recommend selling them, while the remainder recommend holding them in a portfolio. The average target price of €205 implies a drop of more than 12% from the Sept. 10 close.
This article was AI-translated and verified by a human editor
