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Hermes Wins: LVMH-Hermes'S Takeover And Anti Takeover Battle

2011/2/1 23:51:00 111

LVMH Hermes Holdings

Asset Restructuring: French market authority approves Hermes immunity


There were family members who tried to sell small shares, and AMF, the French securities regulator, said it would grant Hermes the right to protect its own capital for sale.


The jury consists of 16 members, and AMF said it will issue official results before the specified date.

Hermes said it was very satisfied with the result. LVMH avoided comment. The small shareholders held an oath that they would appeal again.


LVMH said last month it bought Hermes shares again, plus 17.1% of its previous purchase, and now owns 20.2% of the company's shares.

AMF separately examined whether LVMH had violated market rules in the process of buying shares through securities institutions.


Although Bernard Arnault, chairman and chief executive of LVMH group, said that LVMH did not intend to completely control Hermes, Hermes resolutely protected its companies from rejecting these unwanted acquirers.


Dumas, Puech and Guerrand family have more than 70% of Hermes international shares. The company's limited structure ensures that these three families can jointly manage and control.

But the three families also hope to further strengthen their control. The method they propose is to withdraw 50% of their shares and form a non listed holding company.


If one of the three parties does not know or disagree, then the company will not be able to sell the surplus normally.

Shares

Hermes thought that for better management and control of the company's shares, he asked AMF to give him immunity, and those shares would only be restructured.

In a statement, Hermes said AMF's ruling would help companies push forward the restructuring of shares, reflecting both the wishes of family members and the Hermes culture.


But Colette Neuville, chairman of the French small shareholders Association ADAM, believes that AMF's decision is unfair and should be appealed again.

She felt that less than 10% of the minority shareholders had the power to freely buy and sell shares.

In 2005, Carrefour SA had a similar case, and finally won by small shareholders.


The voice of anti LVMH in the family is still rising.


  

LVMH

The remaining shares of all publicly held shares of Hermes are purchased, which is estimated to cost LVMH Mo t Hennessy Louis Vuitton of about 3 billion 800 million euros.

Despite the strong cash flow and low debt performance, the aggressive attitude and behavior of the magnate king of the luxury goods industry has caused many symptoms.


Recently, Luca Solca, an analyst at Bernstein research, put forward a hypothesis in a report.

Not entering the stock market, according to Solca, will limit the resale of shares in the Hermes family, but this will also lead to a more likely takeover or merger by the LVMH.


However, if LVMH's shares exceed 33%, then LVMH may launch a comprehensive acquisition. At that time, Hermes members will not accept it. They will require LVMH to have a higher share share but not to hold it.


Last October, LVMH Group acquired Hermes17.1%'s shares through cash settlement, which rose to 20.2% last month.


Last week, AMF passed the resolution, allowing

Hermes

Redistribution of family shares without the purchase of shares of minority shareholders will also facilitate Hermes to deal with unsolicited purchasers.

The report also details that not all family members are willing to participate in the stock market.


Colette Neuville, chairman of the French small shareholders Association (ADAM), said it would appeal against the resolution of AMF, which deprived shareholders of their right to buy and sell shares.

LVMH has not yet expressed his views on AMF's decision and whether to continue appeals.


AMF will separately examine whether LVMH violated market rules when buying Hermes shares through financial derivatives.


At the same time, insiders say that Hermes will face internal obstacles if it reestablishes shareholder agreements, but the voice of anti LVMH in the family is still on the rise.


Hermes said that before the end of the appeal, the company would not restructure family holdings, which means that family members can have time to reflect on what is behind the great wealth of the past 20 years.

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