(Bloomberg) -- GrandVision NV surged for a second day after Ray-Ban sunglasses owner EssilorLuxottica SA began takeover talks in a deal that would the smaller Dutch eyewear retailer at about 7.1 billion euros ($8 billion).
EssilorLuxottica is holding talks with GrandVision’s controlling shareholder, HAL, to buy the firm’s approximately 77% stake, HAL said in a statement on Wednesday in response to a Bloomberg report, which was confirmed later by the French-Italian suitor. Shares of GrandVision jumped as much as 10% Thursday, reaching 25.30 euros, their highest level since September 2016.
An acquisition could GrandVision at about 28 euros a share, the Schiphol-based company said in a separate statement, or about 33% higher than the stock’s closing price on Tuesday before reports of the talks emerged. At that price, HAL’s holding would be worth about $6.2 billion.
Following the completion of a deal, EssilorLuxottica would make a public offer for all of GrandVision’s shares, the Dutch company said. No agreement has been reached and any transaction would be subject to regulatory approval, HAL said.
By adding GrandVision, which sells prescription glasses, contact lenses and other eyecare products, EssilorLuxottica would gain more than 7,000 stores in more than 40 countries. GrandVision operates under retail brands including Brilleland and For Eyes. In addition to its well-known sunglass labels, including Oakley, EssilorLuxottica owns store chains like LensCrafters and Pearle Vision.
HAL Holdings
HAL is majority-owned by the Dutch billionaire Van der Vorm family and traces its roots to the 1873 founding of the Holland America Line in Rotterdam. Its current incarnation dates to 1989 when the owners sold the cruise line to Carnival and started an investment company with the proceeds. HAL holds large stakes in listed and non-listed companies, with GrandVision its largest holding, and has a market of more than 11 billion euros. It also has a $3 billion stake in Koninklijke Vopak NV and holds about $626 million worth of SBM Offshore NV.
GrandVision rose 8.8% Wednesday after Bloomberg reported the talks. EssilorLuxottica was little changed Thursday in Paris.
GrandVision raised about 1 billion euros in its initial public offering in 2015, plugging the money into expansion plans and valuing the company at about 5 billion euros at the time.
Management Feud
EssilorLuxottica’s interest in GrandVision comes only two months after the company defused a leadership dispute that weighed on its shares. The eyecare maker, the result of a merger of France’s Essilor and Italy’s Luxottica, said in May that it would seek a new chief executive officer -- an effort to find a compromise between Chairman Leonardo Del Vecchio and Vice Chairman Hubert Sagnieres.
The dispute flared up after the companies sealed their $53 billion merger last year, with Del Vecchio saying he wanted to appoint his deputy as CEO and Sagnieres countering that the Italian was making false statements in an effort to seize control of the group.
Before Bloomberg reported the takeover interest, the Dutch company’s shares had risen 9% over the past 12 months, in contrast to a 4.4% decline for EssilorLuxottica, which has a market of 51 billion euros.
Del Vecchio is EssilorLuxottica’s biggest shareholder with a 32% stake. Born in 1935, he founded Luxottica in 1961 with a handful of workers and transformed his business from a small maker of eyeglass frames into a global giant through a series of acquisitions.
©2019 Bloomberg L.P.
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