Exclusive-Armani has approached potential buyers over stake sale, sources say

By Amy-Jo Crowley, Dominique Patton and Mathieu Rosemain LONDON (Reuters) -Armani representatives have approached potential buyers over a minority stake in the renowned Italian fashion group, three sources told Reuters, starting a de facto auction for a slice of one of the world's best-known fashion empires weeks after the designer's death.  L'Oreal is among those that have been approached, two of the people said. Private equity bidders so far have not been solicited as potential buyers, one of those sources and a fourth person said. Rothschild is expected to advise the company on a transaction, according to two of the sources. The group has a link to the advisory firm through Irving Bellotti, a Rothschild partner who sits on the board of the Armani foundation. The talks are at an early stage, however, one of the people said, adding that any progress could take months. ARMANI INSTRUCTED HEIRS TO SELL STAKE WITHIN 18 MONTHS Reuters could not determine who had done the outreach on behalf of the sellers of the company. The four sources spoke on condition of anonymity because the matter is private. Armani Group and Rothschild declined to comment. L'Oreal, which holds a licensing agreement with the Armani group until 2050, did not respond to requests for comment. In his will, late Italian designer Giorgio Armani instructed heirs to sell an initial 15% stake in the fashion house within 18 months of his death, and later to transfer an additional 30% to 55% stake to the same buyer or seek a market listing. The will says priority should be given to luxury conglomerate LVMH , beauty behemoth L'Oreal, and eyewear maker EssilorLuxottica , with which the fashion house has a commercial partnership. It may also be given to another group of "equal standing" identified by a foundation the designer set up to preserve his legacy with the agreement of Armani's business and life partner Pantaleo Dell'Orco. All three companies named previously issued statements suggesting they were open to the possibility of a deal.  The will was published last month following the designer's death on September 4. It lists six different types of shares with different voting rights.  The charitable foundation and Dell'Orco hold 30% and 40% of the company voting rights respectively, meaning they would together control the fashion group with 70%. The foundation will retain a 30.1% stake in a listing and in a sale, the will says. Dell'Orco, who was also on the foundation's executive committee, could not be reached for comment.  A representative for the Armani foundation declined to comment via email. BRAND COULD BE WORTH UP TO 12 BILLION EUROS  Giorgio Armani was the sole major shareholder in the company he set up 50 years ago and over which he maintained a tight creative and managerial rein.  The potential sale process is being closely watched, as the brand remains one of the most iconic in the fashion industry and could be worth between 5 billion euros and 12 billion euros ($14 billion), according to analyst estimates. The provisions in the will are essentially binding and could be challenged in court if not fulfilled, according to the Italian notary association. ($1 = 0.8517 euros) (Reporting by Amy-Jo Crowley in London and Dominique Patton and Mathieu Rosemain in Paris and Lisa Jucca in Milan. Additional reporting by Elisa Anzolin. Editing by Anousha Sakoui and Jan Harvey)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)