Further snub for LVMH chief in takeover fight

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The Independent Online
Drinks groups Grand Metropolitan and Guinness yesterday announced a large shake-up of their senior management teams in the wake of their proposed pounds 24bn merger.

The move is an apparent snub to Bernard Arnault, the head of the French luxury good group, LVMH, who is due to send a letter to GrandMet and Guinness in the middle of next week outlining alternative proposals to merge the spirits divisions of all three companies to form an independent quoted group.

There is speculation in the stock market that Mr Arnault is considering putting a compromise proposal to GrandMet and Guinness which would involve splitting its Moet Hennessy champagne and fine wines businesses into two separate operations. It is understood that LVMH would then propose to buy back Guinness's 34 per cent stake in Moet, while Guinness would purchase the outstanding 66 per cent of Hennessy it does not already own giving it full control of the brandy business and leaving LVMH with the champagne.

Guinness and GrandMet showed they were confident a merger would go ahead and be cleared by competition authorities around the world by appointing 32 senior executive appointments to the new group, GMG Brands. But both sides refused to say who or how many top executives would have to leave the group. Analysts believe as many as 30 top management jobs could be at risk.

Gerald Corbett, GrandMet's finance director, is the highest profile departure announced so far.