Hermès And LVMH File Complaints Against Each Other Over Stock Sales
Hermès International filed a complaint against LVMH Moët Hennessy Louis Vuitton almost two months ago, reportedly accusing the conglomerate of insider trading and stock price manipulation. Not one to back down from a legal battle, LMVH is now filing a retaliatory complaint.
The backstory: in October of 2010, LVMH revealed that it had bought 17.1 percent of Hermès stock through derivatives, which allowed LVMH to sneakily but legally bypass announcing the purchase. LVMH’s top gun Bernard Arnault said the sale was friendly, and that it wasn’t an indication of a hostile takeover. By the end of the year, LVMH owned 22.3 percent of stock. Hermès obviously didn’t believe Arnault’s story, so the Dumas, Puech, and Guerrand branches of the Hermès clan formed a holding company to fend off a potential takeover.
According to WWD, Hermès filed a complaint in Paris on July 10 that “concerns the terms of LVMH’s entry into the capital of Hermès International.” Unnamed sources who are familiar with the situation say that the complaint “accuses LVMH of insider trading and manipulating stock prices.”
Naturally, LVMH is following up with a complaint of its own, and is citing “blackmail, false accusations, and unfair competition.” This legal battle sounds like it’s just heating up (who said summer was over?), and we’ll definitely keep you updated.