A pool of banks has lent 1,150 billion lire (e594m-$508m) to Vittorio Tabacchi to help him and his children Massimiliano and Samantha to complete the acquisition of all the Safilo shares they didn't own before. They are currently involved in a public friendly tender at 12.50 euros a share for the 19.83 percent stake of Safilo 's equity that is trading on the Milan stock exchange. The operation will cost them 492 billion lire (e254m-$218m). Added to the 548 billion lire (e283m-$242m) already paid to Giuliano and Dino Tabacchi to buy out his their shares, that makes a total of 1,030 billion lire (e532m-$455m).

As rerported, Vittorio Tabacchi set the operation in motion last year, in order to avoid the risk of Italy's second-largest eyewear producer falling into the hands of a competitor, such as Luxottica, or a fashion giant such as Gucci, which already has a lucrative licensing agreement with Safilo. Safilo's latest official press release states that the operation will provide more stregic flexibility and simplify the ownership structure, which will be reorganized, and make the group more competitive.

It's not clear how Safilo will become more competitive through this maneuver, considering Vittorio Tabacchi's mounting debt.

Banca Populare di Milano, Interbanca and Efibanca, which provided the loans, were probably reassured by Safilo's ability to generate high net earnings, which rose last year to 95 billion lire (e49m-$42m), but it's easy to speculate that these are only bridge loans. Gucci, which has set aside more than $2 billion for acquisitions, may help pay back the loans by taking a minority stake in Safilo, giving it perhaps also the coveted Yves Saint Laurent license, but as sole owner, Vittorio Tabacchi will be able to better negotiate the terms fo Gucci's partial entry, as De Rigo has already done with Prada and LVMH.

The present tender offer, which expires on July 20, has been formally launched by Programma 2002, a company set up specifically for this purpose by Vittorio Tabacchi, with the assistance of Mediobanca. The terms of the bid have been duly accepted by Safilo's board. At the time of its launch on July 2, Vittorio, Massimiliano and Samantha Tabacchi held 80.17 percent of the group's equity, directly or indirectly.