Armani's partner Dell'Orco to head foundation that will play key role in sale, document shows

By Elisa Anzolin

MILAN (Reuters) -The Giorgio Armani Foundation, key to the Italian fashion house's future and eventual planned sale, will be led by the late designer's partner and close confidante Pantaleo Dell'Orco as chair, a document seen by Reuters on Tuesday showed.

Dell'Orco was left the largest portion of the company and main voting share when Armani died last month. He will head the board along with one of Armani's nephews and three independent members, according to a foundation filing obtained via a freedom of information request.

The foundation is key to Armani's succession plan. His will unveiled the shock order to gradually sell the firm he founded to potential buyers including LVMH, L'Oreal and EssilorLuxottica, or seek a market listing.

The designer, known in the industry as "King Giorgio", died on September 4, aged 91. He left the company to his heirs and the Foundation, which was set up in 2016 and chaired by Armani himself until his death.

The foundation controls 30% of the voting rights of his business empire. It was created to protect Armani's legacy. Armani's business and life partner Dell'Orco already controls 40% of the luxury group's voting rights.

Alongside him on the board will be Armani's nephew Andrea Camerana, who holds 15% of the company's voting rights.

However, the majority of the board is made up of non-family members: Rothschild banker Irving Bellotti - who was already a director - Legance lawyer Andrea Silvestri and Milanese notary Elena Terrenghi.

KEY ROLE IN ARMANI'S FUTURE

The Foundation will play a central role in shaping governance decisions and ownership changes at the fashion house, which will also require the agreement of the external advisors on the board.

Under the foundation's bylaws, the five board members must unanimously approve key decisions, such as voting at extraordinary shareholders' meetings of the luxury group.

Armani's will instructed the heirs to sell a 15% stake in the group, with priority given to luxury conglomerate LVMH, beauty heavyweight L'Oreal, eyewear leader EssilorLuxottica or another group of "equal standing" identified by the Foundation and with the agreement of Dell'Orco.

The will directs heirs to sell the initial 15% stake within 18 months. Subsequently, they are to transfer an additional 30% to 54.9% to the same buyer within three to five years or, alternatively, pursue an initial public offering.

The Foundation is also tasked with proposing the name of the fashion group's new CEO, the company's executive committee said last month.

(Reporting by Elisa Anzolin, editing by Giulia Segreti and Susan Fenton)