* Caprotti in talks with private equity funds over possible
* Group valued at up to 6 billion euros
* Ill health, dispute with two children could complicate
By Silvia Aloisi, Claudia Cristoferi and Elisa Anzolin
MILAN, Sept 30 Having worked all his life to
build Italy's fourth biggest supermarket chain and protect it
from rivals, 90-year-old Bernardo Caprotti spent the past few
months fighting to make sure his brand will thrive without him.
The billionaire, working from his three-storey, heavily
guarded home in central Milan, has been in talks with private
equity funds to sell his Esselunga chain for as much as 6
billion euros ($6.7 billion), people close to the matter said.
Wary of selling out to rivals or handing the business down
to his squabbling children, Caprotti wants the private equity
bidders to give a rare promise: keep the Esselunga brand and the
business for the long term, up to 10 years, the sources said.
"Any deal would have to guarantee the continuity of the
business and avoid a break-up," said one source. "All he cares
about is the good of the company."
An Esselunga spokesman declined to comment on the status of
any sale talks, which sources say include CVC Capital Partners,
Blackstone and BC Partners. Spokesmen for the three
declined to comment.
Caprotti founded the company in 1957 with his brothers and
U.S. businessman Nelson Rockefeller, developing the first
U.S.-style supermarket chain in Italy, before becoming its sole
owner. It now employs 22,000 people and last year had sales
topping 7 billion euros.
Over the years, Caprotti spurned approaches from several
competitors including U.S. giant Wal Mart and Belgium's
Delhaize, so it came as a surprise for the Italian business
community when it emerged this month that he had hired an
adviser, Citigroup, to look at potential bids.
As often happens in a country where a fifth of major
family-owned firms are run by someone in their 70s, events can
conspire quickly against elderly entrepreneurs struggling in the
twilight of life to pull off a deal that will safeguard their
In the case of Caprotti, a sharp-tongued workaholic who
sports a reinforced Esselunga yellow plastic bag as his
briefcase, ill health could complicate matters.
In recent days, Caprotti has taken gravely ill, said two
people close to the situation. Until then, he had been actively
working from his home, close to Milan's La Scala opera house.
"Caprotti has personally followed the negotiations up until
now, even though his health is not good," another source said.
Caprotti stepped down as Esselunga chairman in 2011, left
all executive roles in 2013 and has not been seen at Esselunga's
headquarters on the outskirts of Milan for the past year.
But he has remained involved in day-to-day management and
no major decision is taken without his blessing, sources said.
"If you send him an sms, he will reply in a nanosecond,"
said a person who works with him.
A deal is uncertain, complicated not only by Caprotti's poor
health but also by a bitter legal dispute between him and two of
his three children over ownership of the group.
A person familiar with Caprotti's thinking said he wanted to
ensure the Esselunga business, Italy's most profitable
supermarket chain, did not become the battleground of
potentially squabbling heirs.
His 55-year-old son Giuseppe, who climbed the ranks to
become chief executive in 2002, was stripped of his powers in
2004 and left the group in 2005. He and his sister Violetta
later took legal action against their father, alleging he had
illegally taken shares from a trust in their name in 2011.
So far the courts have sided with the father, though a final
appeal is pending.
Caprotti's other daughter from his second marriage, Marina,
sits on the board of Esselunga.
Giuseppe Caprotti told Reuters he has always opposed a sale
of Esselunga but did not want to comment further on the issue.
Under Italian law, he and Violetta could claim around 33 percent
of their father's estate upon his death. By law, the father
cannot disinherit them.
DOOR CLOSED TO RIVALS
Bernardo Caprotti refuses to sell out to rivals, fearing the
chain would vanish overnight.
He has long accused its Coop rivals of blocking his group's
expansion out of its northern stronghold, thanks to their links
to centre-left politicians, a charge the Coop businesses firmly
reject. Esselunga has only just set up its first superstore in
the capital, Rome, expected to open next month.
Caprotti is viscerally attached to the company, having built
it from scratch to post sales of 7.3 billion euros in 2015, a
rise of 4.3 percent, a growth rate nearly double the sector
According to a study by Mediobanca, Esselunga's revenue per
square metre is more than three times that of rivals Carrefour
and Auchan in Italy, and more than twice that of the dominant
player in the country - the "Coop" or cooperative supermarkets.
However Caprotti has his critics.
He runs the group like a family patriarch and has not
groomed a successor among its managers, according to three
former senior company officials who say they quit out of
frustration that they could only do things his way.
"It's a cultural problem. In Italy a company is seen as an
extension of its founder, not as a separate entity," said Guido
Corbetta, a professor at Milan's Bocconi University and an
expert on family owned businesses.
($1 = 0.8925 euros)
(Additional reporting by Pamela Barbaglia in London, Valentina
Za in Milan, Francesca Piscioneri in Rome; Editing by Mark
Bendeich and Anna Willard)