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Investing.com -- The head of Qatar-backed Mayhoola dismissed reports on Friday suggesting the fund and Kering (EPA:PRTP) were exploring a sale of their jointly owned fashion label Valentino.
“This news is untrue,” Mayhoola CEO Rachid Mohamed Rachid told Reuters, responding to a Corriere della Sera article that had triggered early gains in Kering shares.
Kering stock rose nearly 3% early Paris trading following the report. The shares have fallen more than 60% over the past two years amid mounting challenges in the luxury sector.
Commenting on the initial report, RBC Capital Markets analysts said they would view the potential sale "as a positive from Kering’s perspective as the €4bn remaining liability that is yet to be funded and at a valuation that we view as rich relative to today’s luxury sector, could be avoided if a buyer can be found."
Kering acquired a 30% stake in Valentino in 2023 for $1.7 billion, with a commitment to purchase the remaining 70% by 2028. The deal, made at a peak valuation just before the luxury market slowed, has weighed on the company, which is now under investor pressure to reduce debt and raise cash through asset sales.
According to Kering’s latest annual report, completing the Valentino acquisition could cost up to €4 billion if Mayhoola exercises its put options as early as 2026.