PARIS — PPR launched its friendly takeover offer for Puma AG on Monday, and voiced optimism for its 2007 prospects.
Speaking to shareholders at the company's annual meeting here, PPR chairman and chief executive officer François-Henri Pinault said the international economic climate looks "solid and promising," with emerging markets, a widening customer base for luxury and rapid growth of online sales bolstering his confidence.
The sentiments echoed those of Bernard Arnault, chairman and ceo of LVMH Moët Hennessy Louis Vuitton, who last week told shareholders the group was enjoying a "positive and stable" economic period.
Despite tepid growth in its retail arm, PPR saw its first-quarter sales advance 5 percent, to 4.45 billion euros, or $5.88 billion, led by a 10.7 percent gain in sales at Gucci Group.
"The good performance gives us confidence for the rest of the year," Pinault said.
Looking relaxed and smiling broadly, Pinault said PPR would continue to build its store network, particularly for its Gucci Group luxury division, with a dozen new outlets in the cards for Bottega Veneta, and an accelerated program of renovations for its cash-cow Gucci brand, which will open 12 units, including six locations in China and its first in India. Citing robust gains in Internet sales last year — up 23 percent at the Redcats catalogue and 24 percent at the Fnac book and music chain — he said Gucci Group would broaden sales of luxury online, with Gucci widening e-commerce to Europe and Bottega and Boucheron both venturing into e-commerce shortly.
Monday's meeting coincided with PPR's launch of its friendly takeover of Puma AG and, responding to a shareholder question, Pinault confirmed he would "not budge" on its offer price, which remains "firm and final."
The offer, at 330 euros, or $447, per share, values the activewear firm at 5.3 billion euros, or $7.17 billion. PPR said it is launching the takeover process through its subsidiary Sapardis, with the acceptance period ending June 20. After clearing European regulatory hurdles, the deal should wind up in early July.
Last month, the French retail and luxury conglomerate acquired a controlling 27.1 percent stake in Puma, with ambitions to make it a world leader among sport lifestyle brands.Puma's shares have spiked well over 330 euros on takeover rumors, fueling speculation of a richer bid from PPR or a counteroffer from other companies.
PPR said its offer represents a 17 percent premium on the weighted average domestic stock price for Puma over the last three months. The company also said it would not pursue a de-listing of shares of Puma, which will keep its headquarters in Germany.
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