MILAN: The owner of Italy's fourth-largest supermarket chain Esselunga, 90-year old Bernardo Caprotti, died on Friday, plunging the future ownership of the group into uncertainty.
Having worked all his life to build the country's most profitable supermarket group and protect it from rivals, Caprotti had in recent months started negotiations to sell it for up to €6 billion ($6.7 billion).
The billionaire fell gravely ill after opening talks with private equity firms a few months ago, working from his three-storey, heavily guarded home in Milan. His death, confirmed in a statement posted on the group's website, raises a question mark over the status of the talks.
Caprotti had been trying to sell the business partly because he did not want to leave it to his squabbling children, sources familiar with the talks said in the days before his death.
The talks involved CVC Capital Partners, Blackstone Group and BC Partners, the sources said. Esselunga has declined to comment on any sale process. Spokesmen for the three private equity firms have also declined to comment.
Shortly before the founder's death, Caprotti's 55-year-old son, Giuseppe, told Reuters he had always opposed a sale of Esselunga but he did not want to elaborate.
Giuseppe and his sister Violetta fell out with their father, taking legal action against him, 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 and Violetta could claim around 33% of their father's estate upon his death. By Italian law, the father cannot disinherit them.
Wary of selling out to rivals, Caprotti wanted 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.
Caprotti founded the company in 1957 with his brothers and US businessman Nelson Rockefeller, developing the first US-style supermarket chain in Italy, before becoming its sole owner. It now has sales topping €7 billion and employs 22,000 people.
Over the years, Caprotti spurned approaches from several competitors including US giant Wal-Mart Stores Inc 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 Inc, to look at potential bids.
A sharp-tongued workaholic who carried a reinforced Esselunga yellow plastic bag as his briefcase, Caprotti was actively working from his home before his health took a sudden turn for the worse, sources close to the family said.
Caprotti stepped down as Esselunga chairman in 2011, left all executive roles in 2013 and had not been seen at Esselunga's headquarters on the outskirts of Milan for the past year.
But he remained involved in day-to-day management and no major decision was taken without his blessing, sources said.
Caprotti consistently refused to sell out to rivals, fearing the brand would vanish overnight.
He had 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 rejected.
Esselunga had only just set up its first superstore in the capital, Rome, which is expected to open next month.
Caprotti was viscerally attached to the company, having built it from scratch to post sales of €7.3 billion in 2015, a rise of 4.3%, a growth rate nearly double the sector average.
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 had his critics. He ran the group like a family patriarch and did not groom a successor among its managers, according to three former senior company officials who said 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.