France's two richest men said today they had found a solution to their battle for ownership of Italy's Gucci, ending an acrimonious feud that has poisoned French corporate life for more than two years.
The world's biggest luxury goods group LVMH, owned by billionaire Mr Bernard Arnault, and Pinault Printemps Redoute (PPR) controlled by France's richest man Mr Francois Pinault, said they and Gucci had reached an agreement that was satisfactory to all sides.
Mr Arnault agreed to relinquish his stake, and Mr Pinault will increase his holding to 53.2 per cent, removing a cloud that has overshadowed Gucci for two and a half years.
The dispute arose in March 1999 when Mr Pinault, invited into Gucci as a white knight shareholder, snatched a 42 per cent stake that diluted Mr Arnault's 34 per cent holding to 20.6 per cent and denied him a seat on the board.
Mr Arnault harried Mr Pinault through the courts in Amsterdam, where Gucci is listed, to get that deal reversed. But today the two reached an amicable agreement to settle their differences, bringing an end to all their legal disputes.
The deal gives Arnault, who has denied he was staging a creeping takeover of Gucci when Pinault intervened, a capital gain of euro 760 million ($687.8 million) on the deal.
LVMH said it would receive approximately euro 2.1 billion in cash before the end of the year, including its capital gain.
PPR shares fell 2.56 per cent on the news due to the deal's financing load, though most analysts are pleased that the bulk of the cost will come three years down the track.
LVMH for its part lost 1.89 per cent to 48.22 euros.