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(Updates with shares in third paragraph.)
Feb. 2 (Bloomberg) -- The Benetton family will offer 276.6 million euros ($364 million) for the shares it doesn’t own in Benetton Group SpA to delist the clothing maker a quarter century after its initial share sale as growing competition eroded its earnings and market value.
Edizione Holding SpA, which owns 67 percent of Benetton, will offer 4.6 euros a share for the stock it doesn’t already hold, Edizione said in a statement last night on the Italian exchange.
Benetton rose 17 percent to 4.74 euros today. The stock has gained 50 percent since Jan. 25, valuing the company at 866 million euros.
Removing the shares from trading would provide the management of Benetton with the “required flexibility in the medium to long term to take the actions necessary to meet the challenges arising from the changed competitive environment,” Edizione said in the statement. Benetton hired Morgan Stanley to advise on the offer.
Benetton, known for its brightly colored knitwear and controversial advertising campaigns, had a market value of more than 4 billion euros a decade ago. Growing competition from clothing retailers such as Inditex SA’s Zara contributed to a slump in the company’s share price.
Benetton first sold shares to the public in 1986, when it listed stock in Milan, according to the company’s website. The shares began trading in Frankfurt two years later and on the New York Stock Exchange in 1989.
Benetton’s net income in 2011 fell to “slightly” more than 70 million euros from 102.8 million euros in 2010, it said on Jan. 31. Inditex, now the world’s largest clothing retailer, earned more than eight times that amount in just the third quarter of last year.
--Editors: Andrew Davis, Sara Marley
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