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BULGARI shares soar on LMVH takeover Deal

Mar 11th, 2011 | By | Category: Italian News

(ANSA) – Milan, March 7 – Bulgari shares skyrocketed on the Milan stock exchange Monday following an agreement which will give control of the Italian jeweler to the French luxury giant LVMH.

By late morning Bulgari shares had soared over 58% to just over 12 euros, close to LVMH’s offer of 12.25 euros per share for the Bulgari family’s controlling interest of 50.42%.

The LVMH offer represented a premium of more than 60% over Bulgari’s closing price on Friday, The share-for-share operation involves LVMH issuing 16.5 million new shares in exchange for the Bulgari family’s 152.5 million shares.

LVMH said it would also offer 12.25 euros for minority shares on the market making the takeover worth close to 3.7 billion euros.

Once the deal has been completed, the Bulgari family will become LVMH’s second-largest stockholder with a 3% stake in the world’s biggest luxury conglomerate.

Brothers Paolo and Nicola Bulgari will remain chairman and vice chairman of the family company, respectively, while CEO Francesco Trapani, their nephew, will not only retain his post but also join LVMH’s executive board.

In a statement issued after the deal was approved at the weekend, Trapani said giving control of Bulgari to the French giant “will bolster our group’s long-term development while respecting its history, its values, its artisanship and identity”.

Becoming a leading shareholder in LVMH, he added, “will allow Bulgari to reinforce its development on a world level and to achieve significant savings, above all in the areas of acquisitions and distribution”.

As a member of LVMH’s executive board, Trapani will head the group’s watch and jewelry division, which includes such brands as Tag Heuer, Chaumet, Zenith, Hublot, Fred and De Beers.

LVMH Chairman Bernard Arnault explained in a statement that “the alliance between my group and the Bulgari family is an ideal match, from all points of view, because we share the same mentality in regard to the identity and history of our brands, the quest for excellence, creativity and innovation”.

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