Etam's founders launch buyback program to take over

Two of the three families that founded Etam Développement group – Milchior and Tarica families – have launched a buyback program to take over the whole company. The Milchior-Tarica tandem is offering minor stakeholders 23 euros per share, aimed

to gain control over the 18 percent of the company that remains in the hands of these shareholders.

The Milchior and Tarica families, which in total hold the 67.89 percent of the lingerie group, have joined forces to launch a bid to take over the company. The third founding family - the Lindelmann, remains in control of a 14 percent stake.

"Noting the lack of liquidity of its title, Etam Développement and control concert Milchior - Tarica have decided to offer shareholders the opportunity to sell their shares on the market by launching two bids" the company said in a statement last week.

The offer price reflects a premium of 28.5 percent over the last closing prices of Etam, in the region of 17-18 euros per share, as highlighted by the French journal ‘Capital’. Shareholders will not be obliged to accept the offer, still to be approved by the French market regulator, the AMF.

The concert Milchior-Tarica remains the majority stakeholders since 2009 and had already launched this type of offer in 2010, at a price revaluing action by 52 percent compared to its average rate over three months, as reported by ‘Les Echos’. The operation was then intended to provide shareholders with an output window at a time when the course already illiquid, had progressed.

Etam founding families launch shares buyback program

Controlling shareholders of Etam Développement announced in late August two buyback programs at a price 23 euros per share. The first offering will cover 17.7 percent of the capital as shareholders at the Lindelmann family do not seem keen on putting their 14 percent stake on offer.

The second offer, which is part of the Etam shares buyback program, will cover a maximum of 10 percent of the capital, explained the company after it presented its annual results.

Following these liquidity offers, Etam Développement and Finora (owned by the Milchior family) have stressed that they do not have any intention to fill in an offer for a public buyout yet to maintain the current listing of Etam Développement shares within the Paris-listed Euronext.

Laurent Milchior, co-manager of Etam, told Reuters that their main goal was to offer broader possibilities for profit to shareholders. "I do not want the shareholders to bear the risk of a potential lack of liquidity," Milchior said in reference to the difficulties the company has suffered in China, its main market as accounts for half of the company´s total sales.

“In recent years, the company has focused much of its efforts on China, where the first half has generated 200,000 euros, compared with 6.1 million euros in the same period last year," highlighted the group´s management. “The group has continued to suffer from structural problems such as the positioning of their brands and the need to seek new distribution channels," said Etam in a statement.

Sales for the first half of the year came in at 596.8 million dollars, registering a 7 percent increase on a yearly basis. Nevertheless, the company's operating income fell by 3.5 percent to 18.4 million euros.

Etam has an annual turnover of 1.2 billion euros and a market capitalisation of 138 million euros. The group´s debt currently stands at 134 million euros.