Chapter 325 Battle for Gucci

When Barron mentioned the name Gucci, Bernard could not help but frown slightly.

The reason for this is also very simple. Starting from the acquisition of Boussac, the parent company of Dior, in 1984, in the past 20 years, Bernard Arnault has successfully brought many luxury brands under his ownership.

These include dozens of luxury brands such as Louis Vuitton, Givenchy, Berluti, Kenzo, Guerlain, etc. It can be said that in this series of acquisitions, Bonnard has made a killing in all directions, and there is no omission...

The only failure was the failure of LVMH's acquisition of Gucci...

"What? Your Highness the Duke is also interested in Gucci? But now it..."

"I know that PPR Group has obtained 42% of Gucci's shares, and compared with LVMH, I am afraid they are more inclined to each other."

Barron's words were like adding salt to Bernard's wounds. Although he tried his best to control it, it could be seen that his face was not very good...

"but……"

Barron continued:

"I'm here to help you, Mr. Arnault."

"help me?"

"Yes, PPR Group's bid for your Gucci shares is US$2 billion, right? I am also willing to use US$2 billion to purchase your Gucci shares."

"Is this what you call helping me?"

Hearing Barron's words, Bernard couldn't help laughing and said to Barron.

"Yes, since you are ready to sell your shares in Gucci, selling these shares to me is the best choice..."

Barron was not moved at all and said calmly:

"You have also said before that my industry has not been involved in the luxury goods industry. So compared to your competitor PPR Group, selling Gucci shares to me will be able to recover funds. Compared to you five years ago, When buying Gucci shares, you can still earn US$600 million, and Gucci will not completely fall into the hands of the PPR Group. Otherwise, relying on Gucci's current good development trend, the PPR Group will have a greater impact on the LVMH Group's business. threat, so I said I was helping you, was that right?"

When Barron said these words, Bernard couldn't help but be stunned for a moment. As an old fox, of course he understood that what the other party said was indeed very reasonable.

Since he has no hope of completing the acquisition of Gucci, and since he wants to sell Gucci shares to raise funds to acquire other brands, of course it is better to sell the shares to others at the same price. It would be better to sell it to PPR Group to fund the enemy...

For example, the British Duke in front of you?

Gucci was founded in Florence in 1921.

After nearly 70 years of development, it fell into trouble due to poor management in the 1990s.

In 1992, its losses reached more than 40 million US dollars and it was almost bankrupt.

In 1989, Bahrain Fund (Investcorp) purchased 50% of Gucci shares held by Aldo Gucci (son of Gucci founder) and his descendants, while Maurizio Gucci (grandson of founder) continued to own the remaining 50% and continued to manage it. company operations.

In 1993, Maurizio Gucci decided to sell all the remaining 50% shares to the Bahrain Fund and officially left the company.

Then Tom Ford was appointed as the creative director at the critical moment. It took five years to increase Gucci's net profit from a loss of US$22 million in 1993 to a profit of US$195 million in 1998.

Due to Gucci's strong revenue growth during this period, Bahrain Fund decided to list Gucci in the Netherlands and the United States.

Among them, in October 1995, 49% of the shares were listed on the Amsterdam Stock Exchange; in 1996, the remaining 51% of the shares were listed on the New York Stock Exchange.

Now that 100% of Gucci's shares have been listed and circulated, this well-developed luxury brand has naturally been robbed...er, Bernard Arnault, who is making acquisitions everywhere.

In January 1999, LVMH first purchased 100,000 shares of Gucci Group at US$55.84 per share, with a shareholding ratio of more than 5%, meeting the filing requirements with the U.S. and Dutch Securities Regulatory Commissions.

Seven days later, it bought 631,000 shares of Gucci Group at a price of US$68.87 per share, bringing its shareholding ratio to 9.6%.

The LVMH hunting operation continues.

Four days later, with the same operation, LVMH’s shareholding ratio reached 26.6%

By January 25, its shareholding ratio had risen to 34.4%.

In just 20 days, LVMH spent a total of US$1.4 billion to buy 34.4% of the Gucci Group's shares. This move alarmed Gucci's management. However, Gucci's CEO De Sol had great legal experience at the time and had already sold Gucci before it went public. A defense plan has been developed against a hostile takeover.

So after LVMH held 34.4% of Gucci's shares, he did not hesitate to launch the "poison pill plan" and issued 20.1549 million new shares to the management, diluting LVMH's 34.4% stake to 25% in one fell swoop. , whose voting rights were thus completely neutralized.

Under the protection of Dutch law, Gucci initiated protective measures and issued protective preferred shares, the so-called "white knight".

The "white knight" they found was PPR Group. In March 1999, Gucci and PPR Group quickly reached an alliance.

Gucci issued new shares to PPR Group, the number of which was almost twice the number of shares held by LVMH. LVMH's shareholding was further diluted to 20%; while PPR Group was allowed to increase its shareholding to 42%, but was not allowed to continue to acquire Gucci Group within 5 years. shares.

Therefore, five years after 1999, it was now 2004. After the ban expired, PPR Group was also preparing to continue to increase its shares in Gucci to complete the complete acquisition of Gucci...

The first thing they set their sights on was the 20% of Gucci shares held by LVMH Group. After all, under such circumstances, it was impossible for LVMH Group to complete the acquisition of Gucci. There was no big way to retain these shares. Useful.

For LVMH Group, the sale of Gucci shares can allow them to recover US$2 billion in funds - PPR Group's price for the 20% of Gucci shares is US$2 billion, which is more than what they spent to acquire these shares five years ago. 1.4 billion U.S. dollars, and a profit of 600 million U.S. dollars - using these funds to acquire other luxury brands will also make the LVMH Group's brand army even larger.

But now, the emergence of Barron has given Bernard a better choice.

As he said, instead of selling this 20% stake to PPR Group, allowing it to completely control Gucci and adding a strong rival to itself, it is better to sell the shares to another party, which can also recover funds and also Wouldn't it be nice to watch Gucci continue to be locked in a battle for control?

As for Barron, he knows that the reason why Kering Group (PPR Group) has become one of the three giants of luxury goods is actually mainly supported by Gucci...

Now is the only opportunity to snatch Gucci from the PPR Group and gain a foothold in the luxury goods industry. Otherwise, the PPR Group will really buy 20% of Gucci shares from LVMH, thereby increasing their shareholding. 62%, then the other party's situation is decided, and he has no chance at Gucci.

Of course, in addition to meeting Bernard Arnault and getting the Gucci shares from him, Barron has already asked his funds to purchase Gucci shares from the secondary market and give them to PPR. The group completed its control of Gucci and created the greatest difficulties.

Even in the worst possible outcome, he still failed to snatch Gucci from the PPR Group, but he could at least hold a certain amount of its shares and enjoy the dividends from the development of this luxury brand with great potential.

During this meeting, Barron successfully persuaded Bernard Arnault, and he agreed to sell 20% of Gucci shares to Barron for US$2 billion.