The founder (pictured), who runs the eponymous brand, has decided to float in Milan even though other premium brands such as Prada or Graf diamonds have preferred a far eastern location for their public share offerings.
“He’s very Italian and wanted to have this IPO in his domestic market,” says one person close to the deal.
If the deal succeeds, it will represent a triumph for the Italian financial markets and signify a further return to financial health following the gigantic rights issue for Unicredit that Bank of America Merrill Lynch also masterminded earlier this year.
With the Eurozone crisis dominating the headlines, many commentators felt that the Unicredit rights issue was heading for disaster but the deal was eventually a resounding success with take-up of more than 90 per cent, justifying Bank of America Merrill’s decision to back it strongly.
The plan for Brunello Cucinelli is to raise around €150m of new money, which would take Cucinelli’s stake of around 95 per cent down to between 60-65 per cent.
A management group holds the remainder of the shares at the moment and its stake will be diluted too after the float.
The proceeds of the float will be used to expand the brand outside of Italy, with Asia being the main focus of growth. The group has stores in Mayfair and South Kensington, London. The share issue will be taken to Italian investors in the first instance but also to other European and US investors.
Pricing is expected at the end of April with trading schemed in for early May if all goes well.
News of the flotation comes during a week of frenetic IPO activity in the US, where around ten businesses are due to complete IPOs.
Bankers are yet to try their luck in the UK, where the IPO markets have been effectively closed since the giant Glencore flotation last year. Sources close to the IPO market in London are hoping that it will re-open towards the end of the year, with confidence bolstered by the success of share flotations elsewhere.
Recently, the relationship between investors and private equity groups and other owners willing to sell shares in listing companies deteriorated after a series of flotations flopped, with issues either being pulled or going ahead but then disappointing as share prices dipped below their issue price.