Puma welcomes takeover offer
PPR, the French luxury goods maker behind the Gucci and Yves Saint Laurent brands, said Tuesday that it would buy a 27% stake in Puma and planned to make an offer for the rest in a deal that valued the German sporting goods maker at $7.1 billion.
Puma welcomed the offer and said management would recommend it to shareholders.
PPR said it was paying $1.9 billion for the stake in Puma held by the Mayfair investment firm of Hamburg, Germany.
After that deal, PPR said, it planned to launch a “friendly takeover offer” for Puma’s remaining shares at the same per-share price of 330 euros (about $443). PPR said it expected to complete the offer in July.
Puma’s board “unanimously believes that PPR’s engagement is in the best interests of the company” and that the price was fair, Puma said in a statement.
Puma shares soared 10% to 346.03 euros -- above PPR’s offered price -- in Frankfurt, Germany. The shares had risen more than 10% on Thursday, the last trading day before the Easter weekend, on talk of a bid. PPR shares rose 3.2% to 133.03 euros in Paris.
The company, established in 1948, is the world’s third-largest sporting goods maker, after U.S.-based Nike Inc. and Adidas, which also is based in Germany.
Puma, which had sales of $3.2 billion last year, has been working to expand its reputation as a maker of fashionable clothes, shoes and accessories.
Executives of PPR, which also owns luxury brands Balenciaga and Stella McCartney as well as the Fnac music chain, described the offer price as “firm and final.”
Still, the jump in Puma’s stock to a level above the bid price indicated that some investors expected that PPR would raise the offer or that another bidder would enter the fray.
Puma Chief Executive Jochen Zeitz stressed that his company considered PPR “the right partner” when asked during a conference call about the possibility of a rival bid. “Should there be another offer, we’d closely examine it,” he said.
A report by Standard & Poor’s said Puma “would provide PPR with an international brand carrying strong worldwide recognition, as well as diversification into the sportswear industry, which enjoys strong growth prospects.”
