LVMH hit by Gucci `poison pill'
Friday 19 February 1999
Gucci has adopted the "poison pill" defence tactic by introducing a staff stock ownership scheme that effectively reduces LVMH's voting power from 34.4 per cent to 26 per cent. It is an unusual ploy by the designer goods group to force LVMH either to launch a full bid for Gucci or withdraw from its affairs. One analyst described the move as "luxury handbags at five paces".
LVMH, the French company run by Bernard Arnault, controls a string of luxury names, such as Louis Vuitton luggage, Moet Hennessy champagne and the Christian Dior fashion brand.
It has been gradually building up a large stake in Gucci. However, even when its stake reached 34.4 per cent it expressed no interest in bidding for the whole company.
As Gucci is quoted in Holland, there are no trigger points after which a shareholder must mount a full bid.
Gucci rejected Mr Arnault's plans to introduce some of his appointments to the Gucci board and to make "commercial proposals." Instead it has created an employee stock ownership plan which will be issued with 37 million new shares, of which 20 million were immediately exercised. The shares will have full voting rights, thereby blocking the LVMH stake. Gucci will also issue more shares if LVMH takes its holding higher.
LVMH responded by saying that it would take the matter to the courts. Gucci was adamant that its actions were "well within the letter and the spirit of corporate law in Holland". A Gucci spokesman added: "We have taken legal advice and we are happy with our position."
Mr Arnault had nominated three additional members for inclusion on the Gucci board but said they would all be "independent of LVMH".
Gucci chairman Domenico De Sole said: "Having the eyes and ears of a competitor on the board would create a serious and unacceptable conflict of interest."
Another Gucci spokesman said this "would be like Coca-Cola having someone on the board of Pepsi".
By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen
New essay by JK Rowling went live on Pottermore site this morning
New UK station Russia Today gives a very bizarre view of Britain
Top Gear presenter is no stranger to foot-in-mouth controversy
- 1 Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
- 2 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
- 3 Woman blinded as a child can see again after hitting her head on a coffee table
- 4 Top Gear presenter Jeremy Clarkson criticised for beer tweet
- 5 The bubble bursts for Sodastream
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Woman blinded as a child can see again after hitting her head on a coffee table
Top Gear presenter Jeremy Clarkson criticised for beer tweet
The bubble bursts for Sodastream
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...