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Kering to Distribute Puma Stake to Its Shareholders

Kering is fine tuning its focus on luxury.

The Gucci and Balenciaga owner announced Thursday that it plans to distribute 70 percent of Puma shares to its investors. The spinoff will leave the company with only a 16 percent stake in the German athletic brand.

Puma’s shares sank 16 percent on Friday, its worst fall since September 2001, Bloomberg reported.

Kering founder Francois Pinault’s holding company, Artémis, which holds 40.9% of Kering’s shares, would become a long term strategic shareholder of Puma with an ownership of about 29 percent. Puma’s free float would be increased to approximately 55 percent.

Kering’s decision disappointed some Puma investors who had hoped that the company would find a buyer willing to pay a premium for the shares, Bloomberg reported.

Puma’s renewed focus on soccer, running and motorsports as well as its successful collaboration with Rihanna are reigniting sales. Puma, which accounted for about 30 percent of Kering’s sales in 2016, increased its guidance three times last year.

On a conference call with reporters, Puma CEO Bjorn Gulden said there will be no changes to the company’s strategy due to the change of ownership.

The transaction reconfirms Kering’s commitment to its couture, leather goods, jewelry and watch portfolio. In a statement, the company said “the contemplated project would enable Kering to reinforce its status as a leading pure player in luxury with an enhanced, best-in-class profitability.”

“This operation would enable our shareholders to directly benefit from Puma’s future value creation. We are proud to have supported the turnaround of Puma, which now has unrivalled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth, led by its talented and passionate management team. We have laid strong foundations for a bright future for Puma,” François-Henri Pinault, Kering chairman and CEO said in a release.