Shareholder war as Net-A-Porter is valued £550m above sale price

Original investor Carmen Busquets says Net-A-Porter is is worth 'well over' £2bn

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The online fashion giant Net-a-Porter is in the middle of a major shareholder battle amid claims, backed by an independent arbiter, that it was sold for up to £550m less than it was worth.

Six months ago, Richemont agreed to sell the internet retail phenomenon founded by the fashion guru Natalie Massenet for £950m to Italian rival Yoox.

But minority shareholders including Ms Massenet’s original investor, the fashion entrepreneur Carmen Busquets, claim it was worth much more. They own 8 per cent to 10 per cent of Net-a-Porter, and some have refused to sell their shares to Yoox, considering the price to be far too low.

Under Net-A-Porter’s ownership structure, the minority shareholders have the right to request arbitration over any sale. An independent arbiter essentially agreed with their complaint earlier this week, and according to a copy of the report seen by Reuters, said the business was actually worth close to £1.5bn.

Sources said the arbiter’s valuation meant the minority shareholders could be entitled to compensation for the difference in value of their stakes, an estimated £55m, from Richemont.

Ms Busquets has been vocal in her criticism of the deal, saying recently that Richemont acted too hastily in choosing Yoox, citing Net-A-Porter’s sales, double-digit growth and profitability.  She recently told industry bible Womenswear Daily the business is worth “well over” £2bn to £3bn to represent its “trophy status”.

The latest valuation which emerged yesterday is less than an earlier £1.9bn valuation that a Morgan Stanley appraisal carried out on behalf of the shareholders.

Yoox shares fell 73 cents to €29.12 in Milan yesterday, as news of the arbiter’s decision emerged, while Richemont dropped Sfr0.10 to Sfr83.60 in Zurich.

The two sides have indicated the merger deal will not be affected.

Last month the Competitions and Markets Authority said it was considering whether the merger could reduce competition for UK shoppers looking for luxury goods online, and the regulator is set to gives its initial assessment in early September. Yoox said at the time that the inquiry announcement was “normal practice” and that the merger had already been approved by US, German and Austrian anti-trust authorities.

The deal, which will see Richemont emerge with 50 per cent in the new company, is expected to be finalised in October. Under the terms of the deal, Ms Massenet will be executive chairman and Federico Marchetti, founder of Yoox, will be chief executive of the merged company.

Ms Massenet has not commented on the shareholder revolt. She sold the majority of Net-a-Porter to Richemont in 2010 and is one of the minority shareholders but is unlikely to have been critical of the deal.