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Luxury goods group to buy a major stake in Puma

French luxury goods group PPR SA has agreed to buy a 27.1-percent stake in German sportswear specialist Puma AG and launch a full takeover offer, the two companies announced yesterday, in a bid which valued the German company at around 5.7 billion euros (US$7.6 billion).

Pinault-Printemps-Redoute (PPR), which owns a range of top-end fashion brands including Yves Saint Laurent and Gucci, said in a statement that it had agreed to buy a 27.1-percent stake from Mayfair Beteiligungsfondsgesellschaft, the holding company of the Herz family, for 330 euros per share.

"Following this acquisition, PPR intends to launch a friendly takeover in cash on the remaining outstanding Puma shares at the price of 330 euros per share," the statement said.

With a total 17.23 million shares in issue, the offer valued Puma -- the world's number three sportswear maker after Nike and Adidas -- at 5.7 billion euros.

PPR put the total offer price at 5.3 billion euros.

Puma "fully supports this friendly transaction and intends to recommend the offer after reviewing the offer document," PPR said.

In its own statement, Puma welcomed the offer, which it said gave it the support of "a financially strong and leading international company."

Puma said it would also "benefit from PPR's global positioning, strong portfolio of premium brands and expertise in the retail business."

The Puma management board "is convinced that PPR, as one of the world's top fashion and retail companies, will be the perfect partner for us," it said.

"Both companies have a European background and ideally complement each other with regard to their global perspective. With the support of PPR, we plan to strengthen our position as the leading company in the sport lifestyle market with a continued focus on long-term sustainable growth."

Puma said PPR's offer was "in the best interests of the company and that the announced offer price per share of 330 euros is fair."

"Based on a preliminary fairness opinion issued by Lehman Brothers and subject to review of the offer document, the board of management will recommend the offer to shareholders," it said.

PPR said that no job cuts were planned as part of the takeover.

"In the context of the planned transaction there will be no changes with regard to staffing," PPR chief executive Francois-Henri Pinault said.
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