Yoox and Net-a-Porter Merger

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Italian online fashion retailer Yoox could unveil a deal to buy Richemont’s Net-a-Porter.
This time round, sources said an agreement may be easier to find as Net-a-Porter founder Natalie Massenet is finalising her five-year payout with Richemont which could reach more than 100 million euros based on the value of her company as of March 31.
The Swiss luxury group has spurned several informal offers from at least four investment firms for as much as 2.2 billion euros, other sources have said, as the group was reluctant to sell the business outright for cash.
Richemont has a preference for a strategic partner such as Yoox, which it sees as being a strong operator. Also, by selling the business to Yoox, Richemont would no longer need to bear the brunt of investment in UK-based Net-a-Porter, which requires further funds to grow further.
Richemont has more than 4 billion euros of cash on its balance sheet.

The sources cautioned that a deal had not yet been finalised and asked not to be identified because the negotiations were confidential. Richemont and Yoox declined to comment.
The Swiss group tends to prefer to hold on to assets than sell them, even if they do not perform very well, such as its fashion label Lancel and menswear brand Dunhill, as they are tiny compared to its Cartier and Van Cleef & Arpels jewellery and watch units, its main source of profit.
Net-a-Porter, which is expected to become profitable this year after having made estimated sales of more than 700 million euros in the fiscal year just ending, is gauged by analysts to be worth between 1.3 billion and 1.5 billion euros ($1.42 billion to $1.63 billion) using industry multiples.
Italy’s Yoox, which like Net-a-Porter enjoys double-digit growth, is profitable and carries a similar valuation with a market capitalisation of 1.32 billion euros.
Reuters

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