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LVMH ends wine gripe
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April 20, 1999: 10:03 a.m. ET
Takeover of prestigious wine maker echoes battle for control of Gucci
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LONDON (CNNfn) - LVMH took control of prestigious wine maker Château d'Yquem Tuesday, after a drawn-out legal dispute in a case that has strong parallels with the French group's bitter takeover battle for Gucci.
The luxury goods maker doubled its stake in the Bordeaux vineyard to 64 percent, following a court ruling last month that found in its favor.
The deal values the high-class wine maker at $160 million. The highly-prized dessert wine, which starts at $290 per bottle, will sit well with LVMH's other leading wine and champagne brands, including Moet & Chandon, Veuve Clicquot and Dom Perignon.
Arnault built up a 37 percent stake in Château d'Yquem by buying up disparate family holdings before the owner-manager of the vineyard, Count Alexandre de Lur Saluces, went to court 18 months ago to block any attempt at wresting control.
No sour grapes at LVMH
A judge ruled in Arnault's favor this February, forcing the Count to sell up his 37 percent stake holding.
The completion of the deal will give a psychological boost to Arnault's legal team as it prepares to overturn Gucci's defensive measures in an Amsterdam courtroom Thursday.
The battle for control of Gucci has become increasingly bitter since it started four and a half months ago. The Italian fashion house has attempted to block the bid with a number of actions, including issuing new shares to French retailer Pinault-Printemps Redoute, giving it a 42 percent stake.
LVMH's current offer of $88 per share is conditional on Pinault's stake being tendered, something Gucci's management has said it cannot force.
In maneuvering ahead of the court case Gucci called on LVMH Monday to make its offer unconditional. This was rejected outright by LVMH.
"Gucci hasn't in any way created a level playing field under which our offer can succeed and this suggestion has been treated with the contempt it deserves," an LVMH spokesman told CNNfn.com.
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LVMH
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