The recent upheaval in the personal life of Luxottica's boss, Leonardo Del Vecchio, who has remarried his second wife, has upset plans for the reorganization of the equity of the family holding company, Luxembourg-based Delfin. Through this holding company, Del Vecchio has a huge 67.83 percent controlling share in Luxottica, as well as shares in three other companies ? Molmed, Foncière des Régions and Assicurazioni Generali.
Luxottica's founder is in excellent health and looks much younger than his 75 years, but with six children from three women ? aged between 53 and 6 years old ? he is clearly concerned about what will happen once he relinquishes control. With a portfolio of shares worth between €9 billion and €10 billion in the balance, his first concern has been apparently to ensure equitable treatment for his children; the second issue being to protect the world's leading eyewear producer from problems that could result from family tensions. The difficulties experienced in this respect by Luxottica's main rival, Safilo, are a blatant example of the potential risks, as they arose from discord within the Tabacchi family who controlled the group at the time.
Under Luxottica's current equity structure, which was established through a donation four years ago, each of Leonardo Del Vecchio's six children has a right of residuary ownership on 16.38 percent of Delfin's shares. This means that their father retains the right to get dividends on these shares and to take the decisions related to these shares until he dies. He also keeps 1.67 percent of the capital. After his death, the children will get full ownership of the shares.
His two youngest children were born from Sabina Grossi, whom he did not marry, but they were treated as equals to the other four older children to protect them from Italian law, which differentiates between children born within wedlock and outside it. Much younger than Leonardo, she was previously Luxottica's manager of investor relations.
All these facts have been widely reported, but the latest news comes from a Monday supplement of Corriere della Sera, the Italian daily newspaper, which got many of the facts from Consob, the public authority responsible for regulating the Italian securities market. As always when it comes to personal matters concerning the Del Vecchio family, Luxottica has made no comment.
In order to strengthen guarantees for his children and for Luxottica, Del Vecchio subsequently proposed to insert a further «interface» between the shareholders and the operating companies, represented by three new foundations to be set up under Dutch law - one for the children of each of his three women. One would have been established for the three children born from his first wife, one for the 15-year-old son whom he got from his second wife, Nicoletta Zampillo, and another for Grossi's two children.
This arrangement had the advantage of keeping the shares of each foundation below the level required under Consob's regulations to avoid launching a tender offer for the balance of the shares. Consob approved this arrangement, but four months later, the project ran amock due to another episode in Leonardo Del Vecchio's marital status. In fact, last summer, he stopped being single and unexpectedly remarried Zampillo, whom he had divorced when he took up the relationship with Sabina Grossi, who is still sitting on the board of directors of Luxottica. Zampillo thus gained the right to inherit 25 percent of her husband's wealth if there is a will, and a third if there is no will.
Because of her new marital status, her inheritance rights tend to dilute those of the six children, changing the whole structure of the family patrimony. Thus, Del Vecchio is again up against the problem of separating the company's activities from the problems of its shareholders. This is one reason why Del Vecchio has entrusted the management of Luxottica to an outside manager, Andrea Guerra, rather than giving it to one of his three elder children: Claudio, Marisa or Paola.