Gucci and LVMH back in talks

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Gucci parent Pinault-Printemps-Redoute (PPR) and Louis Vuitton Moet Hennessy (LVMH) are once again negotiating to settle their dispute over the ownership of Gucci Group. LVMH is said to be asking for $100 per share to sell its 20% stake in Gucci, the price at which the two companies almost struck a deal last June.

Discussions have been kick-started by LVMH's legal victory in the Dutch courts earlier this month, where a six-month investigation was ordered into the agreement struck between PPR boss Francois Pinault and Gucci ceo Domenico de Sole. This diluted LVMH's previous holding of 34% in Gucci and handed a controlling 42% shareholding to PPR for $3bn.

At stake is whether PPR's shareholding could be ruled invalid by the courts and Gucci would then fall into the control of the more travel-retail focussed LVMH Group. For PPR, the costs associated with a full bid are tempered by Gucci's excellent results just published and the fact that Gucci is still sitting on a $2.5bn cashpile of the $3bn investment.