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Sports Goods Firm Welcomes Takeover

Germany's Puma Leaps on French Bid

Shares in Germany's Puma, the world's third-largest sporting goods company, have leapt following a takeover bid from the French luxury goods firm that owns Gucci.

Puma's share price jumped eight percent to €344.15 ($461.69) on Tuesday after the German sports goods company confirmed it had received a takeover bid from French luxury goods company PPR, which owns luxury brands including Gucci and Yves Saint Laurent.

Puma said it welcomed the takeover, which values the company at about €5.3 billion. It said PPR's engagement was "in the best interests of the company" and that the announced offer price of €330 per share was fair. Puma's share price had already risen 15 percent last week on market speculation about the takeover.

Earlier, PPR said it would make a public offer for the rest of the German sportswear group after agreeing to buy a 27.1 percent stake from Puma's largest shareholder, Mayfair. Mayfair is an asset management company for billionaire siblings Günter and Daniela Herz, who belong to the Herz family which founded the German coffee and clothing retail giant Tchibo.

PPR, owner of the Gucci Group of luxury brands, said it was paying €1.4 billion for the stake in Puma, the world's third-largest sporting goods company after US-based Nike and German rival Adidas. PPR's holdings also include the Fnac music chain and the Conforama furniture chain. The company was known as Pinault-Printemps-Redoute until it changed its name to simply PPR in 2005.

"We guarantee Puma's continuity as an autonomous company within the PPR Group," PPR chief executive Francois-Henri Pinault said in a statement. "There will be no changes with regard to staffing."

PPR said it will issue an offer document for all remaining shares after it receives regulatory approval from the German Financial Supervisory Authority (BaFin), which is expected in May. It hopes to close the deal in early July.

Puma has been working recently to expand its reputation as a maker of lifestyle brands, including clothes, shoes and accessories such as eyeglasses, and grow in more regions and categories.

In 2006, Puma earned a net profit of €263.2 million on sales of €2.37 billion. The profit was down 7.9 percent from 2005 due to heavy investment in the brand and costs resulting from the 2006 soccer World Cup in Germany.

Puma and its arch-rival Adidas have common roots. The brothers Adi and Rudolf Dassler set up a shoemaking business together in 1924 and then split up, with Adi setting up Adidas and Rudolf Puma. Puma was in decline in the early 1990s but current chief executive Jochen Zeitz has turned it around since he took over in 1993.

lan/dpa/Reuters/dpa-AFX