Outlook: Gucci/Pinault

BERNARD ARNAULT makes a strange convert to the game of cricket, but all of a sudden he's decided to play the game and make a proper offer to Gucci shareholders. For the best part of the past year, the urbane boss of LVMH, the champagne-to-suitcases group, has been trying to get his hands on Gucci by building a stake in the Italian fashion house and pressing for seats on its board. In Anglo Saxon markets this is regarded as trying to obtain control without having to pay for it, and it is just not done. Last night, Mr Arnault did what he should have done months ago and announced his intention to launch a full takeover bid for Gucci.

However, Mr Arnault's change of heart is not out of altruism. The prospect of Francois Pinault, a fellow French plutocrat and dreaded rival, riding to the rescue with a plan to inject $3bn into Gucci in return for a 40 per cent stake, is the real cause. The move threatens to scupper Mr Arnault's plans by diluting his shareholding from 34 per cent to around 20 per cent. And it gives Mr Pinault - who showed his fondness for collecting trophy assets when last year he bought Christie's, the auction house - an outlet for his own fashion interests.

Before Gucci shareholders declare Mr Arnault a modern-day saint, however, he will have to pass a few tests. To begin with, he will have to mount the offer, which is currently with the Gucci board. What's more, he has yet to give any idea of a price, indicating only that the offer is pitched at the same level as the one he made informally to Domenico de Sole, Gucci's chief executive, a few months ago when the Gucci share price was trading at around the $70 level.

That said, Mr Arnault's move has put Gucci on the spot. The group has always resisted his attentions by maintaining that it valued its independence, and that there were few obvious synergies between Gucci and LVMH. Offering Pinault- Printemps-Redoute, the department stores group which is Mr Pinault's quoted vehicle, a large dollop of boardroom control in return for taking a minority stake has undermined that argument.

Under the lax Dutch takeover laws which govern the Amsterdam-registered Gucci, the board could still conceivably ignore Mr Arnault and press ahead with its current plans which, amazingly, do not need shareholder approval. Nevertheless, Mr Arnault's actions have at least given Gucci shareholders a glimmer of hope of achieving some value from this underhand battle.

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