INVESTCORP WILL EARN $1.27B AFTER GUCCI SECONDARY OFFER

NEW YORK — Investcorp SA will pocket another $1.27 billion before underwriting costs from the sale of 26.4 million shares of Gucci Group N.V. in a secondary offering.
The offering was priced late Thursday at $48 a share, coming in above the 43 1/2 at which the stock closed on March 12, the day the offering was announced. The rise in Gucci’s shares in those 16 days gave Investcorp an extra $118.8 million.
Investcorp has granted underwriters a 30-day overallotment option to purchase its remaining 3.93 million shares, which could net another $188.6 million before underwriting costs.
Gucci closed Thursday at 49 3/8, off 1/8, on the New York Stock Exchange, meaning investors in the secondary offering were given a discount from the market price. The company itself will not receive any of the proceeds in the offering.
In total, Investcorp, based in Bahrain, could net over $1.6 billion from the sale of its ownership in Gucci, representing more than a sixfold payback on its investment. According to the prospectus for its initial public offering, Investcorp paid $245.8 million for its 100 percent stake in Gucci.
Gucci’s initial public offering was priced at $22 a share in October 1995. In the IPO, Investcorp sold 11 million shares to net $228 million.
Investcorp acquired its initial 50 percent stake from Gucci family members in 1987 and grabbed 100-percent ownership in 1993 with the acquisition of the remaining 50 percent stake held by former chairman Maurizio Gucci.
The offering comes on the heels of spectacular earnings for Gucci. Net earnings in its year ended Jan. 31 vaulted nearly fivefold to $81.4 million, or $1.65 a share, from $17.3 million, or 38 cents, in fiscal 1994. Sales surged 89.7 percent to $500.1 million from $263.6 million.
Another Investcorp property, Saks Fifth Avenue, is gearing to go public, having filed for a $345 million IPO. Investcorp also took Tiffany & Co. public in 1987.
The Gucci secondary offering was underwritten by Morgan Stanley, CS First Boston and Salomon Bros. — Fairchild News Service

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