Gucci wins the right to buy YSL
Friday 28 May 1999
The deal could take place as early as next month.
Yesterday's ruling by the Enterprise Chamber of the Amsterdam Court of Appeals is a crushing defeat for Bernard Arnault, the chairman of LVMH, the luxury goods group, who had asked for a full investigation into the actions of Gucci management in agreeing the sale of 42 per cent of the company to Mr Pinault, thereby thwarting his own, earlier attempts to get control of the group.
The court did, however, rule that an earlier blocking manoeuvre - the issue of new shares to an employee stock ownership (Esop) plan in order to dilute Mr Arnault's 20 per cent stake - was illegal and ordered that it be struck out.
Domenico de Sole, the Gucci president and chief executive officer, hailed the decision to allow the group's alliance with Mr Pinault's company, Pinault Printemps Redoute, to go ahead. "[The decision] will provide a powerful platform for Gucci's transformation into the world's leading multi-brand luxury goods company," he said.
Despite yesterday's setback, Mr Arnault nevertheless vowed to continue his battle, claiming that the court had stated that the issue of shares to Mr Pinault's company was "a violation of Gucci's obligations under Dutch law to act reasonably and fairly towards its shareholders".
He yesterday ruled out a full bid for Gucci and immediately filed a fresh action to strike the Pinault stake with the Amsterdam District Court.
Mr Arnault's statement will disappoint minority shareholders who have been caught in the crossfire in what has become an increasingly bitter and personal feud. The Gucci board has said it will recommend an $88-a- share offer for the company provided it is made as a full offer for the entire share capital of the company and without strings attached, something Mr Arnault has persistently refused to do.
Mr Arnault said that it would offer minority shareholders, excluding Mr Pinault, $91 a share, or $85 a share for all shares, provided Gucci accepts conditions which he says are necessary for a bid to succeed, but which Gucci insists are unacceptable.
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