In 2018, François-Henri Pinault, CEO of French luxury group Kering, announced the group’s intention to refocus on its luxury labels, like Saint Laurent, Gucci and Balenciaga, and to disengage from German sport apparel and equipment brand Puma, which Kering bought in 2007.

The plan involved increasing the Puma equity held by investors other than Kering, with the latter pledging to retain, after a few months, a stake of approximately 16% in Puma. Eventually, Artemis, the Pinault family’s holding company, ended up with a 29% stake in Puma, while the share of floating capital was approximately 55%.

Now it seems that Kering is ready to take another step towards exiting from Puma. The group has announced the issue of bonds that are exchangeable for Puma’s existing ordinary shares, for a total nominal value of €500 million.

It is worth noting that this isn’t a direct sale of shares, and it is a medium-term operation. In a press release, Kering stated that “the bonds will be reimbursed at their nominal value at maturity, on September 30 2022 (in the absence of an early reimbursement), and the issuer reserves the right to remit existing ordinary Puma shares plus an additional cash amount.”

The offer, involving bonds whose individual nominal value is €100,000, is destined to specific financial operators and to markets where this type of issue is approved - this isn’t the case for example in the USA, Japan and Australia.

Kering seems keen to offer an attractive deal, and said the exchange price would represent a premium of 30-35% over a reference share price for Puma. The bonds will be issued on September 30. Kering indicated that “the bonds will give the bearers the right to exchange their bonds with existing Puma shares starting from the 41st day after the issue date and until the 19th working day before the maturity date.”

It will be worth following the variations in Puma’s share price from about mid-December. The share price for the German sports group, whose market capitalisation is €10.5 billion, rose from €44 to €70 in one year. As trading opened on the day of Kering’s latest announcement, the price fell by 2.58%, to €67.90, at 10 am.