Breton outsider set for battle as the rules change in France
Saturday 20 March 1999
The only person who could dispute both titles is Bernard Arnault of LVMH - the man whose ambition to buy Gucci may now be thwarted by Mr Pinault.
The first head-to-head clash between the two comes at a time when three of the largest French banks are locked in a hostile takeover battle. Traditionally, French capitalism has been softer and more consensual than the Anglo-Saxon variety. The times, it seems, are changing in France.
Mr Pinault, 62, a diminutive Breton, started out with a rural logging business which he took over from his father 36 years ago. He now controls a global business empire, estimated to be worth pounds 1.5bn, extending from the British-based auction house Christie's to the Vail ski slopes in Colorado, embracing the FNAC, Printemps and Pisunic chain stores in France on the way.
Apart from his purchase of 40 per cent of Gucci, Mr Pinault is also buying the company that controls the fashion house, Yves Saint Laurent - another recent Arnault target.
Unlike Mr Arnault, Mr Pinault is a French outsider who managed to become the best-connected of insiders. One of his closest friends is the President, Jacques Chirac.
He is known, however, for his loathing of the French far right and was recently accused by Jean-Marie Le Pen - without any evidence whatever - of bankrolling the breakaway movement that split the National Front in January.
Mr Pinault began his expansion by picking up cheap businesses in the Breton bankruptcy courts. In the late 1980s he moved his skills into the national and international leagues, picking up struggling companies with state aid.
It has been alleged that Mr Pinault had access to inside information on the rival bids - not illegal, but typical of the kind of dealings that have left a slight whiff of sulphur trailing in his wake.
Mr Pinault's greatest coup occurred in 1992. He received a soft loan from the hugely over-extended state-owned bank Credit Lyonnais, which enabled him to buy - at virtually no cost to himself - a series of junk bond portfolios in the US.
The seller was Credit Lyonnais itself, which was forced to unload by US regulations. Some of his American acquisitions doubled and tripled in value over the following five to six years.
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