LVMH and Gucci settle litigation

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LVMH Group announced today that in light of PPR's agreement to launch a public offer open to all Gucci shareholders in March 2004, and after contacts with the investigators named by the Enterprise Chamber of the Amsterdam Court of Appeals, the three parties LVMH, PPR and Gucci have reached an agreement and settled their dispute.

The agreement provides that LVMH will immediately sell 8m Gucci shares to PPR at $94 each. Gucci will distribute a special dividend of $7 per share to all Gucci shareholders, except PPR, in December 2001. PPR will launch a full public offer for all Gucci shares at $101.50 per share in March 2004.

LVMH will liquidate all its Gucci shares before the end of 2001. As a result, LVMH will receive approximately Eur2.1bn ($1,909m) in cash before the end of this year, that was effectively locked away. This includes nearly Eur760m ($691m) in capital gains on its Gucci investment.

The deal cements the new structure of Gucci as the world's second largest luxury goods company within the French department store and mixed retail giant Pinault-Printemps-Redoute. PPR chairman Serge Weinburg told a news conference today that at least 30% of Gucci shares will remain floated on the stock market.