One of France's richest men is set to gain control of Italian fashion company Gucci.

If the deal is sealed - assuming the agreement of rival bidder LVMH - Francois Pinault could have full control of the company by 2004.

The agreement would end a two-year battle between the two companies for control of the iconic label.

Pinault Printemps Redoute (PPR) has fought Bernard Arnault's LVMH through the courts for control of Gucci.

"Discussions are currently being held ... but these discussions have not yet been finalized," PPR said in a brief statement.

Dealmaker

Under the first step of the reported deal, PPR would buy half of LVMH's 20% stake for $975m (�682m).

Then, Gucci would pay a special dividend of $7 per share to all shareholders except PPR in November, costing Gucci about $345m.

In March 2004, PPR would buy the remainder of Gucci's shares.

The battle began in March 1999 when Francois Pinault took a 42% stake in Gucci, cutting Bernard Arnault's stake from 34% to 20%.

The move by Pinault stopped Arnault from carrying out what many at Gucci saw as a takeover by stealth.

'Playground brawl'

Since then, Arnault has pursued Pinault through the Dutch courts, in an attempt to reverse his move.

With the end in sight, many investors are thought to be relieved.

"It is the end of the playground brawl between Arnault and Pinault," Laurent Imbert, head of equity investment at fund manager Ofivalmo.

"At last, Gucci management will have some peace because the previous situation was untenable."