Leonardo Maria Del Vecchio, 31, is facing significant hurdles in his $10 billion attempt to acquire his siblings' 25% stake in Delfin, the Luxembourg-based holding company for the Luxottica empire. His plan to increase his stake to 37.5% in Delfin, which was approved by a family vote in April, faltered when the board denied his request for a patronage letter to secure loans from UniCredit and other lenders. This lack of board backing has left the deal without sufficient security.
The financing difficulties are exacerbated by a more than one-third slump in EssilorLuxottica shares since the plan's inception, which eroded the collateral value of Delfin's main asset. Lenders are now demanding additional guarantees. Del Vecchio proposed a clause where Delfin would buy back his enlarged holding at a 33% discount if he defaults, and he is also exploring private credit sources. He has reportedly regrouped, revamping LMDV Capital's management and working on a $1.1 billion refinancing with Apollo Global Management, with potential for expansion to $10 billion.
The family dispute has created a governance crisis at Delfin, the largest shareholder in EssilorLuxottica and Banca Monte dei Paschi di Siena. Other heirs, including half-brother Rocco Basilico, are pushing for a shareholder buyback plan funded by selling Italian financial assets, an idea met with internal resistance. Restrictions on sales of individual stakes and a 10% cap on dividends (of Delfin's $1.5 billion profit last year) further complicate restructuring efforts. A proposal to lift the dividend rule failed to gain approval at the June annual meeting. The outcome of these disputes will impact control of EssilorLuxottica and Delfin's holdings in Generali, UniCredit, and Monte dei Paschi, potentially shifting the governance of a major European conglomerate.
If Del Vecchio fails to acquire his siblings' stakes, he faces a $500 million penalty. The family is considering hiring an external adviser to mediate, and several heirs have initiated steps to move their individual stakes to personal holding companies, which could pave the way for family transactions or a restructuring. The family's $16 billion in financial holdings give them significant influence in the Italian economy and politics, with Generali being a crown jewel. Experts suggest that placing all heirs on equal footing, despite varying interests and ages, was a mistake, leading to the current consensus-driven gridlock.
This ongoing conflict keeps Leonardo Maria's stake at 12.5%, far from his desired 37.5%. The board's refusal to back his financing preserves the current power balance and stalls any immediate reshaping of Delfin. Without board backing, Del Vecchio must rely on alternative financing, but limited collateral and internal family disputes make large-scale loans risky, raising concerns about the future of Leonardo Del Vecchio's estate and industrial legacy.
