Luxottica's share offering on the Milan Bourse was much smaller than the 10-12 percent stake indicated six months ago. Launched on Nov. 28 and closed on Dec. 1, it made only 2.3 percent of the group's equity available for trading on the exchange, for a total of 10,385,000 shares.

In fact, the group has chosen to begin with an initial public offering open to retail investors only. A second offering will likely be made to institutional investors in the 1st half of 2001, probably with a much higher float. Much will depend on the share's valuation. Analysts are not excluding a possible equity increase at the same time if the share price rises considerably.

Leonardo Del Vecchio, chairman and CEO, attributed this cautious approach to the relative uncertainty of the financial markets, particularly in the USA, where Luxottica is trading since 1990 through the system of American Depositary Shares. The other reason is a risk of "flow-back": If the price of the Italian shares rises too high, ADS holders may be inclined to sell off large quantities of shares, thus depressing Luxottica's share price in New York. A new agreement with the Bank of New York guarantees full convertibility between ADS and ordinary shares negotiated in Italy.

In fact, the share got off to a spectacular start on the Milan stock exchange. The initial trading volume was 3 times higher than expected, and Luxottica was one of the few shares that defied the general downward curve of the market. Ten days earlier, on the eve of the Italian IPO in a price range of up to 16.83 euros,, Luxottica's ADS was trading at around $13 on the NYSE. The share price in Milan started at e16.83. On Dec. 4, trading was suspended on the Bourse at e19 because of heavy demand. The stock closed on that day at e17.25, or 2.49 percent more than the day before. It gained a further 2.7 percent on the next day. Since then, Luxottica's share price has declined along with the rest of the Milan stock exchange, going back to the initial quotation. It closed yesterday at e16.90.

The stock floated in Milan was part of the 34.2 percent stake held by Del Vecchio's own Leonardo Finanziaria. It takes Luxottica's publicly trading equity up from 23 to 25 percent of the total. Contrary to reports, Giorgio Armani's shareholding remains at 4.989 percent.

While confirming that he was not interested in acquiring Safilo, as the price was too high, Del Vecchio indicated to the press that he was ready to make further acquisitions if the right opportunity arises. According to this charismatic self-made man, further mergers are inevitable in Italy between small and medium-sized eyewear producers, as they cannot compete globally without expanding in size and obtaining the necessary financial resources.