Arnault moves in to acquire Gucci

The new LVMH bid is conditional on the company securing a majority stake and the termination of Pinault’s involvement " at no cost to the company". LVMH would buy out Pinault’s stake, acquired at $75 a share, and requires Gucci to drop the planned acquisition of the Sanofi beauty products group from Pinault’s Artemis holding company. Following LVMH’s latest offer, Pinault is now mulling his options. Facedwith a $240-million gain on his original $3-billion investment in less than a week, analysts expected Pinault to pull back. LVMH officials have continued their hard line stance against the Gucci board and pursuit of wavering shareholders. The French company claims the rejection of its first bid was contrary to the interests of existing shareholders.

LVMH, whose 34 per cent stake would fall to 21.7 per cent after Pinault’s new shares are included, has secured the support of another 20 per cent, including key institutional investors such as Templeton in the US, said one analyst. Privately, it has said it may be prepared to raise its bid as high as $90 a share to secure control, though this offer would not be open to Pinault.

Gucci shares climbed 7 per cent in Amsterdam on Monday to reach 71.5 euros while in Paris LVMH stock slipped back slightly to 232.5 euros. Gucci officials declined to comment on when the board would respond to LVMH’s latest offer.

Gucci spokesman said the board felt it should weighthe $81 per share offer for it was open to all shareholders. "In addition, the Supervisory Board proposed to LVMH that discussion take place between representatives of LVMH in line with the Dutch Merger Code. Following such discussions, the Supervisory Board of Gucci intends to deliberate further and take a formal position regarding LVMH’s $81 per share offer," Gucci said in a statement.