LVMH alleges Gucci senior management is granted undisclosed stock options by PPR
November 27th, 2000 - The luxury goods group LVMH has asked the Amsterdam Court of Appeals to establish whether members of Gucci's senior management were granted undisclosed stock options worth 8% of the company's capital by Pinault Printemps Redoute (PPR). Gucci will oppose LVMH's action in the Enterprise Chamber, court which has previously upheld Gucci's alliance with PPR.
Gucci is in direct competition with LVMH in many areas of the luxury goods business. In a counterclaim filed in October by Gucci in the District Court as part of its defence against LVMH, the Company asked the court to rule that LVMH, the largest supplier of luxury leather goods and a significant shareholder in Gucci, is abusing its position by exercising an anti-competitive influence over Gucci's business. Accordingly, Gucci asked the court to require the orderly divestiture of LVMH's shareholding in the Company.
Colette Neuville, who heads Adam, a corporate governance consultancy, said the court must determine whether Gucci misled shareholders and granted the stock options without approval from investors.
Gucci, registered in the Netherlands, saw its shares rise 2.8 per cent on Monday to E113.05, giving the company a market value of E11.5bn.