According to Mr Arnault, who hosted a series of meetings with investors and analysts in London yesterday, the current merger plans between the two UK drinks groups were dead in the water. He was confident he could muster enough support from other institutional shareholders in GrandMet to veto the deal. Mr Arnault plans a return visit to London next week to continue his crusade, by lobbying more investors .
He aims to force the UK drinks groups to accept his alternative plans to form a pounds 15bn wines and spirits business, comprising of Moet Hennessy, the spirits subsidiary of LVMH, the IDV business owned by GrandMet and the United Distillers arm of Guinness. Under this plan Pilsbury and Burger King, GrandMet's food businesses, and brewing operations of Guinness, would be demerged.
It emerged yesterday that Mr Arnault, who originally demanded a 35 per cent stake in a merged drinks business, would be willing to swap some of his Moet Hennessy assets and shareholdings in GrandMet and Guinness for a stake in the demerged food and brewing operations. This would leave him with a much lower proportion of the merged spirits groups. Analysts estimated that a deal on this basis could leave Mr Arnault with a stake of less than 25 per cent.
In his first address since he launched his campaigning to stop Guinness and GrandMet in their tracks, Mr Arnualt said yesterday: "We believe we can get the support we need to block a deal. What is important is the logic of our proposals compared to a big conglomerate combining companies that have no real synergy and logic.
"There are things that are negotiable. This [the 35 per cent stake] is open. What is not negotiable is a global structure incorporating four separate entities. I am convinced a creation of a drinks company brings a lot of value and that Moet Hennessy as part of it creates the best drinks company in the world."
Mr Arnault appeared to soften his position on the timing of a demerger, conceding it did not have to take place immediately.
However, he in effect closed the door on any compromise with Guinness and GrandMet by accepting any agreement with the UK companies to spin off businesses at a later date could lead to insurmountable legal problems.
And Mr Arnault showed his contempt of the management of Guinness and GrandMet by refusing to accept mere promises to demerge the businesses.
"If we can complete an agreement today to demerge the businesses in one year, then I could live with. But it would have to be unconditional and our advice is that that is not possible. What are they want to spin it off why is is good to wait? If there is potential in these business now is the perfect time for shareholders to demerge them. What do they offer instead of the failure of their merger?", he asked yesterday
Mr Arnault remains determined to retain control of Moet Hennessy. and was yesterday damning of suggested alternative proposals that would loosen his grip on the business. He refused to consider a combined, but unquoted, spirits business which would form part of the merged Guinness and GrandMet, to be known as GMG brands. He also ruled out plans to split Moet Hennessy in two under which GMG Brands would control the Hennessy Cognac business and LVMH would take control of the champagne operation.
"These plans are not on the agenda. It does not make sense to give up control of Moet Hennessy and get a minority stake in an unquoted company. Moet Hennessy is not for sale and there is no way I would split up the business," he said yesterday.
Mr Arnault hinted he would effectively be prepared to blackmail GMG Brands to reconsider his three way merger proposals. Moet Hennessy and Guinness currently operate drinks distribution joint ventures around the world. GrandMet wants to use these joint ventures to sell its products in the Far East.
But LVMH has the power to block such a move and is prepared to scupper GrandMet's plans. A leading drinks analyst said yesterday: "Mr Arnault's proposals were unlikely to create much extra value.