An orphan who bought Ray-Ban left his empire in identical slices, and four years on the fairest will in Italian business has a Luxembourg court case, a Czech arms billionaire and a son’s counter-offer attached to it.
Leonardo Del Vecchio’s will was scrupulously fair, and fairness has become the most expensive thing he left behind. When he died in June 2022, Delfin, the family holding company and the largest investor in EssilorLuxottica, passed in eight stakes of 12.5 per cent each. They went to six children by three women, to his widow, and to his widow’s son from her first marriage. Nobody could claim to have been short-changed on paper. Four years later, the heir who most wants to end that arrangement has offered to buy out the other seven, and he is not the first person this autumn to try.
Equal shares, equal vetoes
The founder knew something about starting with nothing. Born in Milan in 1935, he grew up poor and was sent to an orphanage by his mother at seven. In 1999 he bought Ray-Ban. By the end he had built a family as layered as his balance sheet. Claudio, Marisa and Paola are his children with his first wife, Luciana Nervo. Leonardo Maria is his only child with Nicoletta Zampillo, whom he married twice. Luca and Clemente are his sons with his partner Sabina Grossi. Rocco Basilico is Nicoletta’s son with her first husband, Paolo Basilico. Nicoletta herself makes eight.
This is a generous way to leave a fortune and a punishing way to run one. Bloomberg has described the eight-way split as a structure that has impeded decision-making amid infighting. European Business Magazine goes further and says a unanimity rule hands any single heir a veto. An equal share, on that reading, is a veto with a dividend attached.
The past year has tested the theory thoroughly. Leonardo Maria tried to buy the combined quarter held by Luca and Paola for €10bn, according to Bloomberg, and a family vote reportedly approved the plan in April. Then EssilorLuxottica’s shares fell, the financing grew awkward, and the loans never won the board’s support. Days before the shareholders’ meeting on 30 June he published an open letter accusing management of raising objections only after the shareholders had backed the principles. An approach for his half-brother Rocco Basilico’s stake was reportedly rejected. Basilico had already left his post as EssilorLuxottica’s chief wearables officer in January.
The lawyers arrived in September. At a hearing in Luxembourg, Delfin asked for six more months to exercise pre-emption rights over stake transfers sought by Leonardo Maria, Clemente and Basilico. What a judge makes of that is a matter for the judge. For the family, it meant that even moving a slice from one pocket to another had become a matter for the court.
A stranger names the price
Families in deadlock tend to assume the outside world will politely wait. On 20 October the outside world wrote a letter. Michal Strnad, the 34-year-old Czech arms billionaire who runs Czechoslovak Group, made an unsolicited, all-cash offer for the whole of Delfin. Its chief executive, Romolo Bardin, received the proposal for the entire capital and told the owners immediately, according to Borsa Italiana. The offer was worth €30bn, pitched at a 30 per cent discount to net asset value. A buyer’s opening position rarely flatters the seller.
Borsa Italiana’s report makes one detail clear. Strnad would reportedly settle for a 62.5 per cent majority, which in a company of eighths means five heirs saying yes. Strnad did not need the family to agree among themselves. He needed five of them to agree with him. A purchase of Delfin could also oblige a mandatory bid for EssilorLuxottica itself, which explains why the market sat up. The shares rallied 15 per cent on 21 October, FTA Online reported.
Strnad did something four years of family meetings had not managed. He put a public price on a single slice. FTA Online calculates that his offer values each 12.5 per cent stake at €3.75bn. For the first time, every heir could look at a number with their own name next to it, and a number like that changes the tone of a family lunch.
Buying the family back
Leonardo Maria Del Vecchio is 31. The Italian press knows him best for Ferraris and nightclubs. Commentators reached for Succession after his appearance on a podcast with the rapper Fedez, and from someone who also owns a newspaper, that was perhaps the point. It was in that newspaper, QN, that he answered Strnad on 2 November. Bloomberg reports a counterbid valued at €29.6bn, structured as an offer to buy out his fellow shareholders in Delfin. He did not disclose the financial details himself. People familiar with the plan told Bloomberg it rests on a loan of up to €22bn from Citigroup.
FashionNetwork reports that he called it the most serious proposal he has ever made and said he had the backing of a major international credit institution. According to FTA Online, he has settled on the same per-stake value as the Czech, which is a tidy way of telling his relatives they lose nothing by keeping it in the family. He offered to buy either at once or gradually over time. A buyout would keep the fortune away from Strnad, and it would also, as Bloomberg puts it, vault Leonardo Maria into the dominant position in the family. Those two aims sit together comfortably for him. His seven fellow shareholders may weigh them differently.
He has also been fighting on a second front. On RTL 102.5 he sharpened his attack on Francesco Milleri, 68, who chairs Delfin and is chairman and chief executive of EssilorLuxottica, a role Milleri has held through most of the period since the founder’s death. Milleri, for his part, told La Repubblica he was deeply sorry about the young man’s departure from the company. Meanwhile EssilorLuxottica’s shares are down about a third this year, and the family’s tensions are among the reasons given.
The argument for his plan is essentially his father’s arrangement read backwards. Leonardo Del Vecchio divided the empire so evenly that it can only be reunited by paying each piece its full price, one relative at a time. The founder bought Ray-Ban from strangers. His son is trying to buy Delfin from his own mother.
On 7 November he is due to put the offer to the other seven. Under his father’s will, each of them carries exactly the same weight.
