PPR’S STAKE NOW CONTROLS GUCCI GROUP
PARIS — Gucci Group is now majority owned by French retail conglomerate Pinault-Printemps-Redoute.
As expected, PPR on Monday completed its purchase of about 8.6 million Gucci shares from LVMH Moet Hennessy Louis Vuitton that will leave it holding 53.2 percent of Gucci’s outstanding share capital.
With Gucci shares priced at $94, the transaction was valued at $806 million. A trio of press releases from the involved parties conveyed the news.
Gucci closed at $83.20, up 4 cents, Monday on the New York Stock Exchange.
As reported, the bitter two-year war between archrivals LVMH and PPR over Gucci was resolved last month with a deal stipulating that PPR would immediately buy about 40 percent of LVMH’s troublesome 20.6 holding in Gucci, bumping up PPR’s holding to a majority. Monday’s transaction satisfies that condition. PPR will then make public a tender offer to Gucci shareholders of $101.50 per share in March 2004.
LVMH reiterated Monday its intention to sell the remainder of its shares by the end of the year.
That will mark the closing chapter to one of fashion’s most bitter battles, which began in March 1999 when Gucci thwarted LVMH’s hostile advances by calling on PPR to be its white knight. Gucci welcomed PPR via a capital increase that ultimately gave PPR a 42 percent stake in the company and Gucci a $3 billion cash injection to fund its multibrand strategy. Its takeover attempt thwarted, LVMH saw its stake in Gucci diluted from 34 percent to 20.6 percent.