Puma shares fall after Artemis plan to sell 29% stake

Investing.com — Puma SE (ETR:PUMG) shares fell more than 2% on Tuesday. It gave back some of the previous session's gains following news that the Pinault family's holding company Artemis was considering selling its 29% stake in the sportswear maker.

The stock, valued at about 930 million euros at Monday's close, had gained in value as Puma shares rose 16% after Bloomberg first reported the possible sale.

RBC Capital Markets analysts said in a note: “We see the potential sale of Artemis' 29% stake in Puma as gradually positive in a story of declining financial performance and a stock struggling with declining importance in the increasingly competitive sportswear sector.”

Artemis has reached potential buyers in Asia, the United States and the Middle East. Chinese sportswear groups Anta and Li Ning have been named as possible bidders.

Artemis is under pressure to reduce its debt, which stands at 27 billion euros by the end of 2024.

Analysts noted that any deal would likely come at a modest premium to the current market value.

However, a sell-off at this point would come after a sharp decline in Puma's stock. The stock has lost nearly 80% since its November 2021 peak.

Anta was identified as a potential fit due to its multi-brand portfolio and acquisitions earlier this year, including its stake in Amer Sports with Jack Wolfskin. “We do not believe Li Ning is a suitable suitor given the single-brand business model,” RBC said.

A buyer of Artemis's 29% stake will not be able to seize control of Puma immediately. Passing 30% under market rules requires a controlling shareholder position, while majority ownership requires at least 50%.

This development coincides with a period in which PUMA is experiencing leadership changes. Arthur Hoeld, who became CEO in April, is expected to present the company's business review during its third-quarter results on October 30.

Analysts note that Puma's financial performance has weakened in recent years, and the brand has lost ground in the competitive sportswear market.

They also added that the new leadership is expected to identify steps to stabilize revenues and earnings.

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