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PUMA to access PPR's core skills & resources to support development

10 Apr '07

3 min read

PPR's strategy is based on achieving superior growth through a focus on international expansion, global brands and retail operations. The ambition is to strengthen PPR's portfolio with higher growth and higher margin businesses and the PUMA transaction is entirely consistent with these strategic priorities.

PPR has signed an agreement with Mayfair for the acquisition of its 27.1% stake in PUMA, for EUR330 per share in cash excluding the 2006 dividend of EUR2.5 per share (to be paid on April 12), implying a total consideration of EUR5.3 billion (assuming 100% acceptance).

Following the acquisition of Mayfair's stake, PPR intends to launch an agreed takeover offer in cash on the remaining outstanding PUMA shares at the same price of EUR330 per share. This price represents:

- A strong premium on the one-month undisturbed weighted average share price (April 3, 2007) of 24%
- An enterprise value of EUR4.9 billion implying a 2006 EV/EBITDA multiple of 12.2x - and a 2006 EV/EBIT multiple of 13.4x. The transaction will have positive financial impacts on PPR including enhanced sales growth, profitability and EPS accretion.

The PUMA Management Board has indicated its unanimous support to the proposed offer. It intends to confirm its support following review and examination of the offer document in accordance with German takeover laws.

The transaction (block acquisition and takeover offer) will be 100% cash financed through existing and new debt facilities. Following the acquisition, PPR estimates the pro forma 2007e net debt / EBITDA ratio will be 3.5x (assuming 100% acceptance) and its financial discipline will allow the company to maintain its investment grade rating.

PPR Group

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