pounds 100m stake for Louis-Dreyfus

JOHN SHEPHERD

Robert Louis-Dreyfus will personally hold a pounds 100m stake in Adidas following the flotation of the German sports company in which he fronted a management buy-in two years ago.

The flotation, the second- largest by a German company, has been oversubscribed 11 times. The 27.3 million shares on offer have been priced at DM68 (pounds 30.56) each, right at the top of the expected range, which started at DM59.

Adidas is valued at DM3.1bn (pounds 1.4bn) by the flotation price. Sogedim, a company controlled by Mr Louis-Dreyfus, will retain a 30.8 per cent stake, worth pounds 424m, in Adidas.

Mr Louis-Dreyfus owns 24 per cent of Sogedim, and has agreed not to sell any more Adidas shares for a year.

The scramble for shares was not confined to German institutions and nationals, who bought almost a third of the shares on offer. UK institutions bought 20 per cent, and demand was heavy in America, home to two of the company's biggest rivals - Nike and Reebok.

Shares will be listed on the Frankfurt bourse, and they are also expected to be quoted on the Seaq International service offered by the Stock Exchange. A listing in Paris is also planned.

Most of the money raised will be used to repay loans from venture capitalists, led by Credit Lyonnais, who funded the leveraged 1993 buy-in. The original amounts loaned to Mr Louis-Dreyfus, a former Saatchi & Saatchi chief executive, and his co-investors, has never been disclosed.

The flotation caps an eventful few years for Adidas, which was in considerable financial trouble when it was run by Bernard Tapie, the disgraced former football manager and French politician.

Pentland Group, the UK sporting goods company that made hundreds of millions of pounds in the Eighties from an investment in Reebok, abandoned a pounds 215m takeover bid for Adidas in 1992 when it uncovered "serious problems" after spending three months examining the books.

Adidas eventually reported a loss of DM135m for 1992 on turnover of DM2.7bn. However, the company's fortunes have changed sharply since then and in 1994 sales of DM3.2bn yielded taxable profits of DM151m.

The recovery has continued, and profits in the first six months of this year from sales of football boots, footballs and other sports kit exceeded the total for the whole of 1994 at DM160m.

Adidas, best known for its football boots, recently signed a sponsorship deal with Newcastle United, current leaders of the Premier League in England. Other sponsorships have been signed with the Olympic squads for Germany, France and Great Britain.

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