By its newly extended deadline at 5 PM yesterday, Hal Holding, the investment company that controls GrandVision and Pearle Europe, had received 50.99 percent of Safilo's high-yield bond in a public tender that had met the resistance of the bondholders because of the lower price being offered.

The acceptance level was below the 60 percent threshold that Hal had set for the bid to be valid. Nevertheless, the group decided to waive the condition and accept the bonds tendered, opening the way for the takeover and rescue of the world's second-largest eyewear company. As a result, the value of Safilo's shares grew by 4.30 percent yesterday and by a further 4.04 percent today, rising to €0.606.

Hal had to extend the tender period twice to obtain a majority of acceptances, which gives it the right to modify a clause enabling bondholders to call for an early reimbursement of the high-yield bonds at full value if Safilo is taken over.

The bonds pay an annual interest of 9.625 percent and are due to expire in 2013. The nominal value of the outstanding bonds is €195 million. Hal is paying 60 percent of the bond's nominal value. With accrued interests, the outlay reaches 60.5 percent.

The success of the tender was the first step in Hal's bid to become a controlling shareholder in the ailing Italian eyewear company thanks to two programmed capital increases. Safilo expects to hold an extraordinary general meeting on Dec.15 or 16 to approve the capital injection, after the previous date of Nov. 23 was dropped.

Shareholders are being asked to approve a €12.8 million capital increase reserved to Hal, which will give the company a stake of up to 10 percent in Safilo. Hal already owns about 2.0 percent of the eyewear company.

A second rights issue of up to €250 million will be open to all shareholders. Here, Hal will take up the rights to any new shares held by Only3T, the holding company of the Tabacchi family that currently owns 39.9 percent of Safilo. Hal and the banks Banca IMI, a unit of Intesa Sanpaolo, and HVB, which belongs to the Unicredit group, have agreed to underwrite some other rights that may not be exercised by other shareholders

At the end of the two capital increases, Hal will become Safilo's largest shareholder with a stake of between 37.23 and 49.99 percent, while the Tabacchis' stake will be diluted to around 10 percent.

However, Hal's takeover of Safilo still depends on certain conditions, one being an exemption to launch a full bid for the eyewear company. Under Italian law, the buyer of a stake of more than 30 percent in a listed company has to launch a full bid for the company. However, the rule can be waived if the company is in financial difficulty.

The other conditions for the deal are clearance from the antitrust authorities, the approval by Safilo's shareholders of the acquisition and the restructuring of Safilo's bank debt.

The takeover is scheduled to be completed by March 31.