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SHANGHAI - A Chinese tycoon has been quietly buying up shares in Italian fashion house Prada SpA in a bid to become the biggest shareholder, his company said on Monday, but Prada in Italy denied this as being completely unfounded.
Lu Qiang's bid was reported by China's Economic Observer newspaper on Monday.
However, Lu Qiang, chairman of Shanghai-based fashion factory outlet Foxtown may abandon the plans, saying Prada had raised its price for the additional stake after learning of his involvement.
"We had not planned to make the bid public. But somehow one media got the news and had a report on this. The price then became very high and therefore we are considering dropping the idea," FoxTown spokeswoman Irene Dou told AFP.
She confirmed that Lu had given an interview to the Economic Observer and did not dispute its report.
The newspaper said Lu had indirectly acquired 13 per cent of Prada over the past two years and aimed to become its biggest shareholder with the planned acquisition of an additional stake of up to 20 per cent.
In Italy, an executive at Prada, who declined to be named, told AFP that the assertion by Lu that he had bought 13 per cent of the business was "totally
unfounded".
He said: "No member of the Prada family has sold shares to Lu Qiang." He said that of the capital "94.89 per cent is held by the Prada family and Mr Bertelli, husband of Miucha Prada, and 5.11 per cent by the Intesa Sanpaulo bank."
In Shanghai, the newspaper report said that Lu had been buying shares through an unidentified Italian consulting firm, which he had acquired for 20 million euros (US$25 million).
But Prada has since upped its price. "(Prada thought) handing over the company to the Chinese will hurt the quality and taste," Lu was quoted as saying.
Lu's acquisition team had planned to invest 450 million euros (US$566 million) in Prada by buying shares from the Italian fashion icon's creditors, the newspaper said.
But the cost of the acquisition had risen between 600 million and 700 million euros, the newspaper said.
Lu was quoted as saying he would sell all his existing Prada shares if he failed to buy the additional stake in the coming week.
At the end of June, the Italian newspaper Corriere della Sera reported that Prada, which has been mulling a stock exchange listing for years, was eyeing a valuation of more than four billion euros (US$5 billion).
Current valuations for the company are ranging "between three and four billion euros" daily Corriere della Sera said, citing bank sources, adding that the company "is aiming at exceeding four billion".
The company, founded as a leather-goods shop in 1913, has put off the decision to launch an initial public offering several times in the past decade, most recently because of poor market conditions.
Earlier in June, the Italian press reported that Prada was considering listing its shares on the Milan and Hong Kong stock exchanges.
The group's sales totalled 1.56 billion euros last year.
- AFP/al
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