The Marcolin and Della Valle families have launched a tender offer for all the shares that they don't own yet in the Italian eyewear company, but they want it to continue to trade on the Milan Bourse. If they collect more than 90 percent of Marcolin's equity, they will issue additional shares within four months in order to keep the stock sufficiently liquid.

Their bid carries a price of €1.40, capitalizing the company at €63.5 million and offering a premium of 18 percent versus the most recent stock market price of €1.25, or of 26.24 percent as compared to the average stock market quotation of the last 12 months. It's the highest price since January 2001 when the stock was worth €1.7. The share price had dropped significantly a few weeks ago, reaching a low of about €0.845 after investors found out that its juicy licensing agreement with Dolce & Gabbana will not be renewed after the end of 2005. It then shot up by 52.5 percent after Diego Della Valle and his younger brother Andrea, who control Tod's, each acquired 12.184 percent of Marcolin's shares at a unit price of €0.925.

After that transaction, the Della Valle brothers got 24.256 percent of Marcolin's shares, while the Marcolin twins, Cirillo and Maurizio, their father Giovanni and other members of their family remained with 29.248 percent of the equity. The subsequent tender offer became mandatory under Italian stock exchange regulations following the conclusion on Dec. 16 of a shareholders' agreement between the Marcolin and Della Valle families, which gave them de facto control over more than 30 percent of the company's shares.

As part of the pact, the Della Valle brothers will first acquire enough shares to reach parity with the shareholdings of the Marcolin family. Subsequently, each family will be entitled to the same number of shares among those tendered.

There is strong speculation that the Della Valle brothers will use the strong influence and prestige that they enjoy in the luxury goods sector ? Diego Della Valle is a member of LVMH's board of directors, among other roles, and a close friend of Luca Cordero di Montezemolo, CEO of Ferrari and chairman of Confindustria, the Italian industry association - to help Marcolin to secure new licensing deals. On the other hand, a rumor that Marcolin plans to shift a lot of its production to China has been denied.

Meanwhile, Marcolin and Luxottica, whose new license for Dolce & Gabbana was due to start at the beginning of 2006, have reached an agreement under which Luxottica will start to sell a significant part of the D&G items developed by Marcolin three months earlier, on Oct. 1. On the other hand, Marcolin will not have to pay minimum guaranteed royalties of about €1.8 million due to D&G for the final quarter of 2005.

The deal concerns in particular the D&G line of ophthalmic frames and it doesn't cover all the markets. Marcolin will continue to sell until Dec. 31 its Dolce & Gabbana Eyewear and D&G Dolce & Gabbana Eyewear lines through its own exclusive distributors in the United Arab Emirates, Qatar, Oman, Syria, Bahrein, Jordan, Japan, Korea, Australia and New Zealand.