Leonardo Maria Del Vecchio, 31, is facing significant hurdles in his €10 billion attempt to acquire a 25% stake in Delfin, the Luxembourg-based holding company of the Luxottica empire, from his siblings. The Delfin board denied his request for a patronage letter to back loans from UniCredit and other banks, effectively blocking the deal due to insufficient security. This decision leaves Del Vecchio with a 12.5% stake, far short of the 37.5% control needed to dominate the €55 billion family group. The board's refusal maintains the current power dynamics within Delfin and prevents an immediate restructuring of the company.
The financing challenges are compounded by a more than one-third slump in EssilorLuxottica shares since the plan's inception, which has eroded the collateral value of Delfin's primary asset. Lenders are now demanding additional guarantees. Del Vecchio has proposed that Delfin would buy back his enlarged holding at a 33% discount if he defaults, an effort to reassure banks, and is also exploring private credit sources. However, internal family disputes and limited collateral make large-scale loans risky without board backing.
The situation is further complicated by a legal challenge filed by half-brother Rocco Basilico in a Luxembourg court, questioning the approval process for the deal. This internal conflict has led to operational stasis within Delfin, threatening strategic capital allocation across its significant holdings, which include EssilorLuxottica, Generali, and Monte dei Paschi. Analysts are closely watching for any signs of compromise among the heirs, as the lack of consensus impacts portfolio companies' ability to execute mergers and acquisitions and affects their share price stability and EBITDA margins. The ongoing governance paralysis in the €55 billion empire highlights the need for robust dispute resolution to safeguard generational wealth.
