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Permira fashions Valentino exit through sale to Qatari investor

12 Jul 2012

European buyout house Permira has agreed to sell Italian fashion house Valentino to a Qatari investor.

The firm had been in exclusive negotiations with the unnamed investor, who has backed the purchase through Mayhoola for Investments.

Permira picked up a controlling interest in Valentino Fashion Group for €5.3bn in 2007, but was forced to split off menswear brand Hugo Boss into a separate entity following the global financial crisis.

That left the firm with a majority stake in Hugo Boss and full ownership of VFG, which was thought to be on offer for about €700m.

The sale follows a difficult couple of weeks for Permira, which scrapped its planned refinancing of frozen food producer Birds Eye Iglo days after rejecting a €2.5bn offer from Blackstone and BC Partners.

The recapitalisation would have seen the private equity firm pocket a dividend of about £500m, swelling the company’s €1.4bn debt to almost €2bn in the process.

But Permira decided against the move after failing to reach the level of dividend payout it wanted.

The buyout house shelved the sale process for Birds Eye Iglo late last month after Blackstone and BC refused to pay the €2.8bn asking price.

Permira is currently in the process of raising its fifth buyout fund, which is targeting €6.5bn.

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