Folli Follie defers London listing indefinitely, sale possible – sources
- Fosun stake-building could continue
- Other potential bidders seen in pursuit
Folli Follie Group [ATH:FF], the Greek luxury goods group, has indefinitely deferred future plans for a London listing and could be open to a sale instead, a source familiar and a source briefed on the matter told this news service.
The company had been mulling a London listing, but this has been put on hold in the wake of speculator allegations, the sources said. On 3 May long-short fund Quintessential Capital Management (QCM) accused Folli Follie of audit irregularities, sending shares down by over 50% over the last 12 days.
The first source and a local analyst said that clearly this is totally the wrong time to consider a secondary listing in London or anywhere else as it would not be able to raise the true value that the company is worth in the wake of the QCM campaign.
Sentiment for Greek IPOs had seemed good on the back of the successful IPO of another local company, Energean Oil & Gas [LON:ENOG], the Greece- and Israel-focused exploration and production company which recently listed in London, the source familiar said. FFG had been optimistic about the secondary listing plan, the source added.
FFG's second biggest shareholder, Chinese conglomerate Fosun International, for its part has changed its strategy from a potential exit via an IPO to a potential takeover, taking advantage of synergies and value it still sees in the company, both sources said. Fosun on 9 May increased its stake from 13.8% to just over 15%, following the price drop of the shares, as earlier reported. If the price remains low Fosun could increase further still, the source briefed added.
Part of the reason Fosun now sees long term growth prospects with FFG is that Fosun has recently established a new fashion group which has luxury portfolio brands such as Lanvin, Wolford, the same source added, declining to elaborate further on any plans with FFG in this regard.
Nonetheless, Fosun is skeptical about being able to gain control of FFG given that the Koutsolioutsos family that closely holds the company, the source briefed said. It could be hard for the family to give up their stake, as the family very much wanted the company to remain a Greek entity, the source briefed added.
The Koutsolioutsos family has 39% in FFG and foreign institutionals have 31.2%, whilst Fidelity Investments holds 8.3% as per the company website.
However, Fosun is not the only company that sees value in FFG and other suitors are already circling also, the first source said.
FFG is vulnerable to takeover not only due to the QCM campaign, but as a result of residues of poor Greek sentiment that the country's eight-year debt crisis has caused, the first source said. There is still a lot of negative sentiment still towards Greek companies, often not based on reality, but those that know FFG and have worked with it see the value and are interested in a potential acquisition, the first source added.
A spokesperson for FFG did not return calls, whilst a spokesperson Fosun said it does “not comment on market rumours”.
FFG announced on 14 May that is has appointed EY to re-audit its accounts.
FF Group designs, produces and markets its own jewelry and accessories brands globally, as per its website. Brands include Folli Follie and British jeweller Links of London.