Why Kering Is Paring Down Its Stake in Puma

Kering has made moves to reduce its stake in Puma.

The Paris-based fashion conglomerate seeks to cut its 15.7% ownership of the German sportswear giant, issuing bonds that can be exchanged for shares of Puma as the Gucci parent directs its efforts squarely on its luxury brands.

Due in September 2022, the 500 million euro ($550 million) bond will be offered at an issue price that is 107.25% to 108.75% of the principal amount of Puma, which Kering purchased in 2007 for 5.3 billion euros ($5.8 billion). The initial exchange price set for the bonds will represent an exchange premium of 30% to 35% over the reference share price of Puma.

In recent years, the brand has managed to secure a spot in the ultracompetitive athletic marketplace dominated by Adidas and Nike. On Aug. 1, Puma posted second-quarter profits up nearly 60% on sales of 1.2 billion euros ($1.3 billion). It has also seen success through high-profile celebrity collaborations and expanding its global presence with the recent opening of its first flagship in the North America region.

Kering’s decision comes nearly two years after it announced plans to spin off 70% of Puma’s shares to investors in an effort to capitalize on the luxury market. The fashion group houses major luxury brand names, including Alexander McQueen, Balenciaga and Saint Laurent.

Groupe Artémis — a holding company led by Kering chairman and CEO François-Henri Pinault — currently serves as Puma’s top investor with a stake of nearly 29%.

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