Guccis owner has reportedly held talks to buy Moncler in a potential $12 billion deal

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• The luxury giant behind Gucci and Balenciaga held talks to buy Moncler in a potential 10.9 billion euro ($12 billion) deal, according to Bloomberg.
• Senior executives at Kering and the Italian ski wear maker held “preliminary discussions about a combination,” but there’s no certainty a merger will happen, Bloomberg reported.
• Moncler’s chairman and CEO, Remo Ruffini, will be a key factor in whether a deal is struck.
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The luxury giant behind Gucci and Balenciaga held talks to buy Moncler in a potential 10.9 billion euro ($12 billion) deal, according to Bloomberg.

Senior executives at Kering and the Italian ski wear maker held “preliminary discussions about a combination,” but there’s no certainty a merger will happen, Bloomberg reported, citing people familiar with the matter.

Moncler’s stock soared about 11% on the news, raising its market capitalization to around $11.1 billion ($12.3 billion). Its shares have now jumped about 44% in the past year.

Kering will need to win over Moncler’s chairman and CEO, Remo Ruffini, for a deal to be struck, Bloomberg added. Ruffini is the group’s biggest shareholder with a stake of about 23%.

“Moncler is clearly an attractive target,” said Ben Kelly, a merger arbitrage analyst at Louis Capital in London, in an email. “It is highly profitable, has less Hong Kong exposure than rivals and would benefit from brand expansion away from its core apparel products and coats.”

Kelly pointed out that Ruffini dismissed the idea of a sale in an interview with the Financial Times in April.

“No one has asked me to buy,” Ruffini said. “We are in a good moment. I would like to see what happens in the next three, four years. It would seem to me a shame to be selling now. And anyway, I am not ready to retire.”

Ruffini would likely seek an offer at the top end of Moncler’s historical valuation range, Kelly said. He floated a potential price of 48 euros a share, representing a premium of 24% to Moncler’s closing price on Wednesday.

“Ultimately, it comes down to Mr Ruffini and what role or not he could play in a combined business,” Kelly said. “That’s anyone’s guess at the moment.”

News of the deal talks comes shortly after LVMH — the owner of Louis Vuitton, Moët & Chandon, and other luxury brands —agreed to acquire Tiffany & Co for $16.2 billion, marking the sector’s largest-ever deal.