A tense, court-imposed cease-fire seemed to be holding between Gucci Group N.V. and LVMH Mo’t Hennessy Louis Vuitton S.A. in mid-March. After LVMH, the French luxury goods house, had snatched up 34 percent of Gucci’s stock in January, the leather goods company countered with a daring legal ploy: It issued exactly the same number of shares to an employee stock ownership trust, thereby stymieing LVMH. LVMH ran to court, which suspended the voting rights for both the ESOP and LVMH’s shares and told the warring dictators of fashion they should try to reach a settlement.
Negotiators were set to meet in Amsterdam at 11 a.m. on March 19 to discuss a standstill agreement — their first get-together since the court ruling. But Gucci pulled another rude surprise as LVMH negotiators readied themselves for the meeting. At 8 a.m. Gucci announced that it had found a white knight. The French retailing giant Pinault-Printemps-Redoute S.A. had agreed to invest $2.9 billion for a 40 percent stake, making it impossible for LVMH to gain control. “When the people from LVMH came, they were pretty agitated,” says Peter Wakkie, one of Gucci’s lawyers, clearly savoring the surprise. “The meeting was not very cordial.” That afternoon, LVMH announced reluctantly that it would make a bid for all of Gucci — at the same time that it was running back to court to challenge Gucci’s tactics.
