Stop the rumors: Fila is sold
Fila Holding SpA (NYSE: FLH) announced late Friday it will sell all its direct subsidiaries (sports shoes and clothing businesses), including Fila USA Inc., to Sport Brands International LLC for $351 million.
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After months and months of speculation, the rumors can now stop. Fila Holding SpA (NYSE: FLH) announced late Friday it will sell all its direct subsidiaries (sports shoes and clothing businesses), including Fila USA Inc., to Sport Brands International LLC for $351 million.
Sport Brands is an affiliate of Cerberus, a U.S.-based private investment fund manager. Based in Biella, Italy, 80 kilometers (60 miles) west of Milan, Fila has struggled to compete with other sports-shoe brands and, as of Dec. 31, 2002, the company’s consolidated financial debt was Euro 295 million (USD $325 million). Sport Brands will assume all financial debt incurred by the Fila group since Jan. 1.
Fila Holding, the sportswear unit of Italian fashion-to-media holding company HdP, expects to close the sale by the end of next June. Fila’s board said it may reinvest the sale’s proceeds into the communication business.
On the news, the stock opened at 1.15 on March 10 (after closing Friday at 1.06), but was down to 1.01 (down 4.72 percent) by the end of the trading day. That’s still a lot higher than its 52-week low on Feb. 19 of 0.70.
SNEWS View: The latest rumor had of course been that Nike was eyeing Fila. Who knows? But now comes Sport Brands/Cerberus. With profitability returning to the beleaguered Italian brand (see our report from March 4), this could only serve to give the brand another foot up and keep it from returning to its past downhill slide — once it can clear up its debt.
