Antonio Vanuzzo and Daniele Lepido
The fight over the late Leonardo Del Vecchio’s €40 billion ($64.7 billion) fortune deepened after the exit of one of his heirs from management roles at the eyewear company he founded.
Leonardo Maria Del Vecchio, the 31-year-old fourth son of Leonardo Del Vecchio, had sought – and failed – to break the deadlock at the family firm Delfin Sarl, the biggest shareholder of EssilorLuxottica SA, which owns brands Ray-Ban, Oakley and Oliver Peoples.
His abrupt decision, made public last week, to step down from roles at the eyewear company and focus on his family office LMDV Capital removes from the group an heir at the centre of the latest attempt to reshape Delfin’s ownership. The clan has been stuck in a four-year feud over the firm since the founder’s death.
Differences among the eight heirs and their many advisers on the structure, ownership and operations at Delfin have led to a governance crisis at a key corporate player in Italy, with consequences not just for EssilorLuxottica but also for the country’s financial sector.
Delfin is the biggest shareholder of Banca Monte dei Paschi di Siena SpA, the lender at the centre of Italy’s latest round of bank dealmaking, and also has a stake in Assicurazioni Generali SpA, one of Europe’s largest insurers, alongside an investment in Unicredit SpA.
For EssilorLuxottica, the stalemate at the family estate is becoming a distraction as it strives to hang on to its first-mover lead in the market for artificial-intelligence smart glasses, which it produces with Meta, and protect its profit margins. That’s becoming increasingly challenging as the likes of Apple, Google and Samsung enter the fray.
“The complexity of Delfin’s corporate governance has had an impact on EssilorLuxottica’s shares,” said Nicolò Nunziata, an equity and multi-asset strategist at Banca Finint, also pointing to pressures from intensifying competition.
“It’s been years since the governance is ridden by internal conflicts, and it could surely improve.”
EssilorLuxottica shares have fallen about 40 per cent this year, giving the company a market value of about €75 billion ($121 billion). The company represents about 60 per cent of Delfin’s asset value as of Friday, according to Bloomberg calculations. To bolster shares after the deep declines and following Leonardo Maria’s exit, EssilorLuxottica on Friday unveiled a plan to buy back as many as 5 million shares, valued at more than €800 million at current prices.
Leonardo Maria’s resignation marked a sharp reversal in his relationship with chief executive Francesco Milleri, the longtime lieutenant his father chose to lead both EssilorLuxottica and Delfin. After years of publicly supporting Milleri, Leonardo Maria used his departure letter to criticise a company culture he said had become more distant, saying managers were celebrated when things went well but pushed aside when things became “uncomfortable”.
‘The sense of belonging isn’t what it used to be. The distance is felt’
Leonardo Maria Del Vecchio
“The enthusiasm isn’t what it used to be,” he said in the letter announcing his decision that was published by MF newspaper. “The sense of belonging isn’t what it used to be. The distance is felt. ”
Leonardo Maria’s exit from the roles of chief strategist for EssilorLuxottica and president of Ray-Ban may not have an immediate impact on the company’s operations, as he was primarily focused on marketing moves such as bringing in rapper A$AP Rocky as a creative director at the maker of the famed aviator sunglasses. The company is unlikely to fill the roles he vacated, according to a person familiar with the matter.
Still, by stepping down he flagged dissatisfaction with the company’s management, and it’s not immediately clear whether other executives and heirs may share those views. If so, that could put pressure on Milleri, who is chairman of Delfin alongside his CEO role at EssilorLuxottica.
A representative for EssilorLuxottica, Milleri and Delfin declined to comment.
Disputes at Delfin emerged after Leonardo Del Vecchio’s death in 2022, with his will leaving each of his eight heirs a 12.5 per cent stake in the family holding company, while putting none of them in charge. A requirement for near-unanimity on important decisions created a stumbling block for his heirs – six children born to three mothers, his widow Nicoletta Zampillo, and Rocco Basilico, her son from a separate marriage.
Earlier this year, the tangle of disputes at Delfin seemed headed toward a possible resolution when Leonardo Maria offered to buy out two siblings, Luca and Paola. The €10 billion plan would have given him a 37.5 per cent stake in the family firm and cleared a path toward wrapping up his father’s estate. It was approved by a family vote in April, before financing and governance disputes derailed the deal.
The heirs filed a so-called transfer notice to Delfin regarding their stakes, and went to court in Luxembourg – where the family holding company is based – to force a way out of the stalemate. The court is expected to formally establish a value for their holdings, but there isn’t a clear timetable, people familiar with the matter said.
A court-established valuation could pave the way for Delfin shareholders to eventually move their holdings to personal family offices, potentially facilitating transactions between family members by reducing disputes over price. But the proceedings won’t resolve the family dispute or change Delfin’s governance. They also won’t remove the biggest obstacle: major decisions at Delfin still require broad family agreement.
“The governance issues of EssilorLuxottica’s largest shareholder aren’t new,” said Margherita Strazzari, an asset manager at Sempione SIM.
“Although it’s difficult to weigh the impact on the company’s shares in the light of factors such as an increased competition in the AI-glasses space, I believe we’re still far from a clear way out of the deadlock at Delfin. This has been going on for years. [The] EssilorLuxottica buyback shows management is confident but it doesn’t really reduce the Delfin risk.”
Bloomberg
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