When Bernard heard Barron mention the name Gucci, he couldn't help but frown slightly.
The reason for this is very simple. From the acquisition of Dior's parent company Boussac in 1984 to the present 20 years, Bernard Arnault has successfully brought many luxury brands under his umbrella.
These include dozens of luxury brands such as Louis Vuitton, Givenchy, Berluti, Kenzo, Guerlain, etc. It can be said that in this series of acquisitions, Bernard has made a great killing and left nothing out...
The only failure was LVMH's failed acquisition of Gucci...
"What? Your Highness is also interested in Gucci? But now it..."
"I know that PPR has acquired 42% of Gucci's shares, and I'm afraid they are more inclined to the other side than LVMH."
Barron's words were like rubbing salt into Bernard's wounds. Although he tried his best to control himself, it was obvious that he didn't look very well...
"but..."
Barron continued:
"I'm here to help you, Mr. Arno."
"help me?"
"Yes, PPR Group's offer for your Gucci shares is $2 billion, right? I am also willing to use $2 billion to buy your Gucci shares."
"Is this what you call helping me?"
Hearing Barron's words, Bernard couldn't help laughing and said to Barron.
"Yes, since you are ready to sell your shares in Gucci, then selling them to me is the best option…"
Barron was not moved at all, and said calmly:
"You have said before that my business has never been involved in the luxury goods industry, so compared to your competitor PPR Group, selling Gucci's shares to me will not only help you recover funds, but also make $600 million compared to when you bought Gucci shares five years ago, and Gucci will not fall completely into the hands of PPR Group. Otherwise, relying on Gucci's current good development trend, PPR Group will pose a greater threat to LVMH Group's business. So I said I was helping you, wasn't it right?"
After Barron said this, Bernard couldn't help but be stunned for a moment. As an old fox, he certainly understood that what the other party said was indeed very reasonable.
Since he has no hope of completing the acquisition of Gucci, and since he wants to sell Gucci shares to raise funds to acquire other brands, it is of course better to sell the shares to others at the same price than to sell them to PPR Group to support the enemy...
For example, the Duke of England in front of you?
Gucci was founded in Florence in 1921.
After nearly 70 years of development, it fell into trouble in the 1990s due to poor management.
In 1992, its losses amounted to more than 40 million US dollars and it was almost bankrupt.
In 1989, Investcorp purchased 50% of Gucci shares held by Aldo Gucci (son of Gucci founder) and his descendants, while Maurizio Gucci (grandson of founder) continued to own the remaining 50% and continued to manage the company's operations.
In 1993, Maurizio Gucci decided to sell the remaining 50% of his shares to the Bahrain Fund and officially left the company.
Tom Ford was then appointed as creative director and spent five years increasing Gucci's net profit from a loss of $22 million in 1993 to a profit of $195 million in 1998.
Due to Gucci's strong revenue growth during this period, the Bahrain Fund decided to list Gucci in the Netherlands and the United States.
Among them, in October 1995, 49% of the shares were listed on the Amsterdam Stock Exchange; in 1996, the remaining 51% of the shares were listed on the New York Stock Exchange.
Now that 100% of Gucci's shares are already listed, this well-developed luxury brand has naturally become the focus of Bernard Arnault, who is on the lookout for acquisitions...er, acquisitions.
In January 1999, LVMH first purchased 100,000 shares of Gucci Group at US$55.84 per share, with a shareholding ratio of more than 5%, meeting the requirements for filing with the US and Dutch Securities Regulatory Commissions.
Seven days later, it bought another 631,000 shares of Gucci Group at US$68.87 per share, bringing its shareholding ratio to 9.6%.
LVMH's hunting operation continues.
Four days later, with the same operation, LVMH's shareholding ratio reached 26.6%.
By January 25, its shareholding ratio had risen to 34.4%.
In just 20 days, LVMH spent a total of US$1.4 billion to buy 34.4% of Gucci Group's shares. This move alarmed Gucci's management. However, Gucci's CEO at the time, De Sole, was very experienced in law and had already developed a defense plan for hostile takeovers long before Gucci went public.
So after LVMH held 34.4% of Gucci's shares, he launched the "poison pill plan" without hesitation, issuing 20,154,900 new shares to the management, diluting LVMH's 34.4% stake to 25% in one fell swoop, and its voting rights were completely neutralized.
Under the protection of Dutch law, Gucci initiated protective measures and issued protective preferred shares, the so-called "white knight".
The "white knight" they found was the PPR Group. In March 1999, Gucci and the PPR Group quickly reached an alliance.
Gucci issued new shares to PPR Group, the number of which was almost twice the number of shares held by LVMH, and LVMH's equity was further diluted to 20%; while PPR Group was allowed to increase its shareholding to 42%, but was not allowed to continue to acquire Gucci Group shares within 5 years.
Therefore, five years after 1999, in 2004, after the ban expired, PPR Group also prepared to continue to increase its stake in Gucci to complete the full acquisition of Gucci...
The first thing they set their sights on was the 20% stake in Gucci held by the LVMH Group - after all, under such circumstances, it would be impossible for the LVMH Group to complete the acquisition of Gucci, and keeping these shares would no longer be of much use.
For the LVMH Group, the sale of Gucci shares will allow them to recover $2 billion in funds - PPR Group offered $2 billion for these 20% of Gucci shares, which is a profit of $600 million compared to the $1.4 billion they spent to acquire these shares five years ago - using these funds to acquire other luxury brands will also make the LVMH Group's brand army larger.
But now, the emergence of Barron has given Bernard a better choice.
As he said, instead of selling the 20% stake to PPR Group, which would allow it to completely control Gucci and create a powerful rival for itself, it would be better to sell the shares to another party, which would also allow it to recover funds and watch Gucci continue to be involved in the battle for control.
As for Barron, he knew that the reason why Kering Group (PPR Group) was able to become one of the three giants of luxury goods was actually largely due to Gucci...
Now is the only chance to snatch Gucci from PPR Group and gain a foothold in the luxury industry. Otherwise, if PPR Group really buys 20% of Gucci shares from LVMH, thereby increasing their shareholding to 62%, then the opponent will be in the lead and they will have no chance at Gucci.
Of course, in addition to meeting Bernard Arnault to get his shares in Gucci, Baron has already ordered his funds to fully acquire Gucci shares from the secondary market, creating the greatest difficulty for the PPR Group to complete its control over Gucci.
Even in the worst outcome, he still failed to snatch Gucci from the PPR Group, but at least he could hold a certain amount of its shares and enjoy the dividends of the development of this luxury brand with great potential.
During this meeting, Baron successfully persuaded Bernard Arnault, who agreed to sell 20% of Gucci's shares to Baron for US$2 billion.