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Tod’s Seen as Takeover Target After LVMH Raises Stake

Italian luxury shoe firm Tod’s S.p.A. said late Thursday that LVMH Moët Hennessy Louis Vuitton would acquire an additional stake in the company, bringing the French conglomerate’s holding to 10 percent.

LVMH will pay 74.5 million euros ($89.9 million) for a 6.8 percent stake, or 33.1 euros ($39.96) per share, in Tod’s. The French firm previously acquired a 3.2 percent stake in 2000 when Tod’s went public on the Italian bourse. LVMH is acquiring the stake from shares held by Diego Della Valle, the founder and chairman of Tod’s.

Della Valle has been an LVMH board member since 2002. He is one of 10 independent directors, according to LVMH’s website. Bernard Arnault, LVMH’s chairman and CEO, and Della Valle, are said to be on good terms.

Della Valle has noted that the partnership between the two firms could be “an excellent reason to consider further opportunities to be taken in the future,” according to a Reuters story on Friday.

While Della Valle has said in the past that he’s not interested in selling the company, that hasn’t prompted speculation about what LVMH might do down the road. And there’s been talk that Della Valle also might want to take the company private as he and his team continue with plans to try to turn around the firm’s business, which includes leather goods.

Analysts at Bestinver believe that Tod’s could be on LVMH’s radar as an addition to the French firm’s portfolio, which includes Italian luxury brands Bulgari, Fendi and Loro Piana. But LVMH also has been busy integrating its newest jewel, American firm Tiffany & Co., so a possibility of a takeover might not come for some time. Tiffany was acquired for $15.8 billion. The transaction closed in January.

Tod’s Group’s has origins dating back to the turn of the 20th century, when Della Valle’s grandfather Filippo set up a small shoemaking workshop. Over the years, the company expanded its production by launching and acquiring other brands. The business now includes luxury footwear, leather goods, apparel and accessories. Brands under the group’s umbrella include Tod’s, Roger Vivier, Hogan and Fay.