Impatient LVMH chief cuts stake in Guinness

LVMH cut its 21 per cent stake in Guinness by a third yesterday, raising pounds 559m to help pay for its purchase of a controlling stake in DFS, the world's largest duty-free shopping group. The placing of the stake by Goldman Sachs with about 100 institutions reflected, analysts said, the growing impatience of LVMH chief Bernard Arnault with Guinness's poor share price performance in recent years.

Guinness used the placing as an opportunity to buy in 2.3 per cent of its own shares at a discount to yesterday's opening price of 436p. It paid 414p each for all the shares Goldman Sachs offered it and is thought to have wanted to buy in more, having already bought in 5 per cent of its shares last March for pounds 463m.

The sale is understood to have been driven by a number of factors, including LVMH's rumoured interest in buying the whole of DFS. It currently owns 58.75 per cent. LVMH is also thought to have been unimpressed by Guinness's trading statement earlier this week, in which the beer and spirits group indicated continuing volume and pricing pressures in its United Distillers spirits arm.

LVMH said it planned to retain its remaining 14 per cent stake in Guinness, removing a potential overhang of shares that had acted as a drag on Guinness's share price. According to the terms of a cross-shareholding arrangement between the two, LVMH is now prohibited from increasing its stake above 15 per cent.

LVMH took a shareholding in Guinness in 1988 in the wake of the illegal share support debacle during the then brewing company's bid for United Distillers. Initially both companies held 12 per cent of each other's shares but the holdings had increased to 24 per cent each by 1990.

In January 1994, a restructuring of the agreement was effected to quell City concerns about Guinness having a large holding in what had become a media and luxury goods group.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat