Red Letter Dates in the Gucci Fight
LVMH executives telephone their Gucci counterparts to say that LVMH has
just crossed the 5-percent ownership threshold for filing requirements
in both the Netherlands and the U.S.
LVMH now owns 9.6 percent of Gucci, having bought the stake that Prada
purchased the previous summer
LVMH has increased its stake to 34.4 percent at a cost of
Gucci sends over a term sheet for LVMH's final approval that
would guarantee Gucci's independence and limit LVMH's ownership stake.
Gucci announces that it has issued new stock to an ESOP that
dilutes LVMH's stake from 34.4 percent to 25 percent of the company.
The Enterprise Chamber criticizes both Gucci and LVMH, expressing
skepticism about the validity of the share issuance to the ESOP and suspending
the voting rights of both LVMH's stock and that of the ESOP. It urged
both sides to continue their negotiations.
Two hours before the two sides were to return to the table,
Gucci announces that it had found a white knight, French conglomerate
Pinault-Printemps-Redoute, and had issued new stock and granted powerful
rights in Gucci to PPR.
LVMH offers to buy all of Gucci's stock for $85 per share
for all shares not held by the ESOP, or $91 per share if Gucci abandons
its white knight.
Gucci rejects the offer. LVMH suggests an alternative: require
PPR to tender its shares, guarantee that a top Gucci designer will stay
at the company for at least two more years. Again, the offer is turned
The Enterprise Chamber strikes down the ESOP and rules that Gucci had
acted improperly by granting PPR a large percentage of its stock when
it had been urged by the court to continue to negotiate with Gucci. However,
the court left the PPR arrangement in place. LVMH appeals to the Dutch
The Dutch supreme court overturns the Enterprise Chamber, ruling that
the lower body should have ordered an inquiry into the matter rather than
issuing a decision.
Just before the results of the inquiry are to be announced, the three
sides announce a complex settlement under which LVMH will cede control
to PPR, and PPR will make an offer for all shares in 2004.