Cinven's Camaieu Challenge

Cinven has received approval from the European Commission for its acquisition of Modamax, a holding company owning 64.6 percent of the capital and 74.5 percent of the voting rights of French clothing retailerCamaieu..

The European buyout firm paid AXA Private Equity approximately Euro 1.6bn (US$2.15bn) for its stake in Camaieu and said that a public offer for the remaining shares not held by Modamax would be registered with French market regulator AMF by the end of may at a price of Euro 267 per share, dividend attached.

AXA Private Equity's exit comes after more than two years of investment in Camaieu, having purchased a 39.6 percent share capital and 54.7 percent of voting rights in January 2005, before buying a further 10.4 percent of share capital from hedge fund Castlerigg Master Investments' that December.

In January 2006, AXA Private Equity declared its intention to launch a Euro 130 per share offer for the remaining shares and de-list the business through a squeeze-out. Despite Camaieu's shares trading in the region of Euro 130 at the time, the Paris-based private equity firm had only achieved the share capital increase of 64.6 percent and 74.1 percent of voting rights that it eventually sold to Cinven by the time that its tender offer closed in February.

At the time, AXA Private Equity made the somewhat disingenuous claim that it was “satisfied” with the share increase and that its “philosophy is to hold stakes in unlisted firms in order to be able to manage its investments autonomously and arbitrate when necessary between profitability, risk and growth, with a medium to long term view.”

That view now appears to have been more medium than long. As yet, it is also unclear quite what Cinven believes it can offer that its French peer could not. Despite a substantially higher share price offer, that is matched by a significant rise in Cama