Italian designer Roberto Cavalli is in talks to sell a majority stake in his eponymous fashion house to VTB Capital, the investment arm of Russia's second largest lender, VTB Bank, two sources close to the company said.
Negotiations between the 73-year-old entrepreneur, known as the "Leopard King" and VTB Capital kicked off at the beginning of the summer after the Florentine firm, famous for its colorful animal prints, repeatedly failed to sell to a "traditional" private equity fund because of its hefty price expectations, the sources said.
Russian firms have shown growing appetite for Italian assets.
Earlier this year, Russia's top oil producer Rosneft acquired an indirect stake in tire maker Pirelli. while vodka tycoon Roustam Tariko purchased Italian winemaker Gancia in 2013. The Russian conglomerate Renova Group, which is owned by another billionaire, Viktor Vekselberg, acquired control of data specialist Octo Telematics in February.
VTB Capital could offer more than 500 million euros to acquire a 60 percent interest in Roberto Cavalli, according to the Russian daily Vedomosti. Such an offer would value the business as a whole at more than 20 times earnings before interest, tax, depreciation and amortization (EBITDA) of 25 million euros.
But the deal could be delayed by the latest round of sanctions against VTB Bank and other Russian lenders over Russia's role in the Ukraine crisis, the sources said.
"VTB Capital was hoping to reach an agreement by the end of the summer, but talks are now advancing at a slower pace because of the sanctions," said the first source, who declined to be named because the talks are private.