PARIS — The merger between France’s Redoute mail order group and Pinault-Printemps, a diversified distribution group, was approved in a report issued Friday by the Paris Commercial Court.
The Court, which appoints accounting and financial experts to evaluate mergers between public companies, said that parity of .91 shares of Pinault-Printemps for one share of Redoute was a valid exchange based on the profit potential for both firms.
The report said that on the basis of the price of each company’s shares, a one-for-one exchange would appear more logical, but an evaluation based on potential earnings was more significant.
However, The Commission des Operations de Bourse, the equivalent of the Securities and Exchange Commission, highlighted the difference in the proposed parity with the one-for-one based on share prices for both firms.
One observer noted the COB was essentially telling shareholders that parities based on share price alone is an important factor in a merger.
The COB has an ongoing investigation into the alleged manipulation in trading of the Redoute group’s shares prior to the merger announcement on Feb. 18. Critics contend Redoute wanted to make the deal seem more appealing to minority shareholders.
On Feb. 18, trading of both companies was suspended with Pinault-Printemps shares quoted at $168.64 and La Redoute shares at $162.71.