MILAN — Pinault-Printemps-Redoute is finally getting some money back — more than $1 billion — from Gucci Group NV.
Gucci outlined in a Securities and Exchange Commission filing Thursday the timetable for payment of its exceptional dividend of 13.50 euros, or $15.53 at current exchange rates, per share, a move approved by shareholders back in July. PPR, which currently holds 67.34 percent of Gucci, will be the major beneficiary of the payout.
As reported, PPR, as of its most recent filing with the SEC, holds 67,180,065 shares in Gucci. At current exchange rates, a stake of that size means a payout of about $1.04 billion.
Gucci said the pay date for shares traded on the Euronext Amsterdam exchange will be Oct. 2. For shares on the New York Stock exchange it’s Oct. 7 and the amount will be paid in dollars, using the reference exchange rate posted by the European Central Bank shortly on the afternoon of Oct. 2.
Thursday was the last day to buy Gucci shares and receive the payout.
The 13.50 euros, converted into dollars at exchange rates set Oct. 2, plus some interest, will be subtracted from the $101.50 per share price PPR must offer for all Gucci shares in March of next year. PPR had been buying Gucci shares on the market at lower prices than the $101.50 level, affording it savings. It will now also benefit from this dividend.
PPR originally said it intended to lift its Gucci stake to about 70 percent by the end of this year.
Gucci said in May, when the offer was originally announced, that it decided to give the cash back to shareholders because it doesn’t foresee making any significant acquisitions. Gucci also noted that it had surplus cash invested in low-risk, low-return financial instruments.
The payment will leave Gucci with cash and cash equivalents “well above” $1.12 billion, or 1 billion euros, and should result in net debt “approaching zero” by the end of this year, according to forecasts made by Gucci management earlier this year.
Separately, French tycoon François Pinault, whose family holding company, Artemis, faces allegations of fraud in a Los Angeles court for its role in the acquisition of failed California insurer Executive Life, has filed a defamation suit against the California insurance commissioner’s lawyer, Gary Fontana, concerning remarks that he made recently in Paris financial daily Les Echos.
In a statement Thursday, Artemis, which controls PPR and Gucci, said it “underscores that Mr. Fontana has never succeeded in showing that Artemis acted fraudulently.”
Pinault faces a suit at the U.S. district court in Los Angeles alleging that he broke the law when he made huge profits by acquiring Executive Life’s junk-bond portfolio in the early Nineties. The case is not expected to be heard before late 2004.