EssilorLuxottica, GrandVision, OPA: Small and large print

If a bad arrangement is better than a good trial, as EssilorLuxottica seems to want to convince its target GrandVision, all the little notes of a chord matter.

Leonardo Del Vecchio, the founder of Luxottica and first shareholder of “Essilux”, is the main character of the 7.2 billion euro takeover of the owner of GrandOptical and Générale Optique. As the terms of a contract are intended to be renegotiated, as the former Essilor employees have learned hard at their expense, it is very readable. Although officially, the purchaser is studying “his options”, the judicial arbitrator has given him excellent leverage to snatch a discount on the price of 28.42 euros each.

The Stock Exchange, having already taken into account in the price of GrandVision 90% of the billion euros less mentioned by “Il Sole 24 Ore”, seemed to estimate that the threat, revealed by Reuters, of a claim for compensation was part of that tactic. She does not forget the fine print, which would render the transaction null and void on July 31 by losing the green light from the anti-trust.

This match will be settled between the second fortune of La Botte and the second Dutchman, the Van der Vorm, holding 76.7% of GrandVision. The last time there was talk of the euro between Italy and the Netherlands, it was in the semi-finals of the European Championship 21 years ago. And the first won it on penalties.

A more reasonable valuation

HAL, the Van der Vorm holding company listed on the stock exchange, has lost 6.4% of its value since the announcement of the arbitration award in favor of EssilorLuxottica, implicitly a little more than a billion on the price of sale of GrandVision.

Oddo BHF analyst calculates that a drop of 10% to 20% in the price (i.e. between 700 million and 1.4 billion) would reduce the valuation multiples of the European optical distributor to between 16 and 18 times the result of operation of 2019 (pre-Covid), down from just over 20 times when the acquisition was announced, in July 2019. GrandVision’s revenue in the first quarter of 2021 remained 11 % below that of the same period of 2019.

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