Luxury group Kering trims Puma stake with 500 million euro bond

FILE PHOTO: A buyer visits a retailer of Puma sportswear firm at Tbilisi Mall in Tbilisi, Georgia, April 22, 2016. REUTERS/David Mdzinarishvili/File Photograph

(This September 25 story has been refilled to appropriate identify of membership to Manchester Metropolis, not Manchester United, in paragraph 5)

PARIS (Reuters) – French luxurious group Kering (PRTP.PA) moved to cut back its remaining stake in Puma (PUMG.DE) on Wednesday by issuing bonds that may be exchanged for shares within the German sportswear model.

Kering, which owns style manufacturers like Gucci, Saint Laurent and Balenciaga, nonetheless has a 15.7% stake after spinning off 70% of Puma to its shareholders final yr.

These traders embody Artemis, the holding firm for the Pinault household that based and controls Kering, and which is now Puma’s main investor with a stake of just below 29%.

Lately Kering has more and more centered on its high-margin luxurious companies, however even inside this portfolio it has disposed of smaller manufacturers like Christopher Kane.

Kering’s 500 million euro ($550 million) bond difficulty, which is due in 2022, will probably be equal to three.5% to three.7% of the share capital of Puma, which has been performing strongly, thanks partly to sports activities partnerships together with with English soccer membership Manchester Metropolis, and superstar advertising and marketing offers..

Puma raised its gross sales and revenue forecasts in July, and its shares have been on a roll, reaching file highs in early September. Puma shares had been down 2.6% on Wednesday in early buying and selling, whereas Kering’s fell 0.7%.

Kering mentioned in its assertion that the preliminary trade value set for the bonds would characterize an trade premium of 30%-35% over a reference share value for Puma.

Executives on the French luxurious group had mentioned in July that Kering was “alternate options” for its Puma stake given how the shares had rallied, however added that the corporate didn’t intend to get rid of all of it.

Paris Newsroom; Modifying by Louise Heavens and Alexander Smith

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