LVMH chief takes stake in GrandMet
Wednesday 18 June 1997
It is Mr Arnault's latest move in an attempt to derail the proposed deal.
He has agreed not to increase his 14 per cent in Guinness after recently selling a 7 per cent stake in the group.
But by taking a stake in GrandMet he hopes to strengthen his bargaining power in an attempt to force GrandMet and Guinness to consider a proposal to merge their spirits divisions with LVMH's drinks subsidiary Moet Hennessy.
"If he takes a stake in GrandMet he can cause a fuss and lobby for a merger of all three companies spirits divisions," said one analyst.
Others see this as a classic tactic from the outspoken Frenchman designed to make a profit for his shareholders.
"Arnault is trying to put the wind up people and hedge his bets at the same time. If he doesn't get his way and the merger goes through he will at least hold a stake in GrandMet which should be worth more. There could be definite upside from this deal," says another industry source. Either way it is thought likely that LVMH may seek to buy more shares in the future.
Mr Arnault's ominous move is the latest shot in an increasingly bitter war between LVMH and Guinness. They are embroiled in a legal battle over control of Moet Hennessy. Last week LVMH confirmed its plans to call in arbitrators over its claims that the proposed merger gives it the right to buy Guinness' 34 per cent stake in Moet Hennessey which has been valued by analysts at around pounds 1bn.
If LVMH wins the case it could effectively scupper any merger plans. LVMH claims any merger will trigger a change of ownership clause. At stake would also be the exclusive rights to distribute Guinness's leading spirits brands such as Johnnie Walker in the US and the Far East for the next ten years.
These contracts alone are worth upwards of pounds 200m a year to Guinness. And GrandMet would be unable to sell its vodka and tequila brands through Guinness, one of the main reasons behind the merger.
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 2 Nick Kyrgios calls former Olympian Dawn Fraser a 'blatant racist' after she tells Wimbledon star to 'go back where their parents came from'
- 3 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
- 4 The Greece debt crisis explained in less than 100 words
- 5 Cristiano Ronaldo storms out of interview after being asked about possible sale of Manchester United target Sergio Ramos
Florida man sentenced to two-and-a-half years for having sex on the beach in front of a child
Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
Eiji Tsuburaya: Godzilla co-creator honoured in today's interactive Google Doodle
Bakery sends 'horrific' version of Frozen-themed birthday cake to unsuspecting customer
Florida teacher sentenced to 22 years in prison for sexually abusing three pupils
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
iJobs Money & Business
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...