Hermès Fights Back Against LVMH By Forming Holding Firm
First the Hermès clan enlisted Salma Hayek, and now it’s formed a holding company to fight back against LVMH‘s takeover. To fill you in, the Dumas, Puech and Guerrand branches of the Hermès family consist of dozens of Thierry Hermès‘s heirs who reportedly own over 73% of the company’s capital collectively.
The family announced its nonlisted holding company yesterday, but did not disclose how many shares it owns. Yeah, they mean business. This move has “reaffirmed its unity and its confidence in the solidity of its control of Hermès International” as “the will of the family to create this majority holding is irrevocable,” they explained in a statement.
Hermès’s shares went up 12% last week, as news of the family meeting spread. And in financial jargon we don’t quite get, as reported by WWD:
Hermès faces opposition from France’s minority shareholders’ association, which argues that it should be obliged to launch a public offer should the family group its shares into bloc. Regulations require that any entity that gains control of more than a third of shares launch an offer.
“This internal reclassification will have no impact on the family’s involvement in the capital of Hermès International, nor on the powers of its limited partnership,” the statement said, adding that it would await approval from the French market authority, or AMF.
The AMF has already launched a probe of LVMH’s investment to determine if rules were respected, which LVMH said it welcomes. In France, companies are required to declare stock purchases when they exceed 5 percent of the share capital.
As tension reaches a fever pitch, we have to say we’re firmly on Team Hermès. Birkins and scarves forever!