Pinault-Printemps To Buy Up To 3 Million Gucci Shares

Retailer Pinault-Printemps-Redoute SA said Friday that it has appointed an unnamed bank to buy 3 million shares in Gucci Group NV (GUC), the luxury goods business in which it already owns 55.2%. At Gucci's current share price in Amsterdam (EUR86.95 at 0805 GMT) PPR would have to pay EUR261 million to buy 3 million shares in the world's third-biggest luxury goods company. The stake is equal to nearly 3% of Gucci's capital.

PPR, which spent about EUR200 million between October last year and mid- January buying 2 million Gucci shares, is committed to launching an offer to buy out all outstanding shareholders in March 2004 at $101.50 per share, in total worth up to $5 billion. Under the terms of that offer, PPR can raise its holding in Gucci to 70% via the open market at any point up to March next year. The French company said the shares will be bought between Jan. 28 and April 4 on both the New York and Amsterdam exchanges, "so long as the purchase price does not exceed a defined maximum price."

The agreement, which is irrevocable, has been structured to assure compliance with Gucci's insider trading policy and U.S. and Dutch securities laws, PPR said. Earlier Friday, Gucci said it will buy back 3.5 million of its own shares between Jan. 27 and April 30. Gucci said it will "temporarily hold the purchased shares in treasury, reissuing them to Gucci employees upon exercise of their stock options."