LVMH ups its stake in Hermès to reignite bid speculation
Thursday 23 December 2010
LVMH, the luxury goods group, has upped its stake in its smaller rival Hermès to more than 20 per cent, reigniting speculation it could be plotting a takeover.
The maker of Dom Pérignon champagne acquired 17.1 per cent of Hermès, best known for its luxury leather goods, in October but said at the time it had "no intention of launching a tender offer, taking control of Hermès nor seeking board representation". LVMH, which makes the Louis Vuitton handbags, has now increased its shareholding in Hermès to 20.2 per cent. But the descendants of the Hermès founding family are determined to hold on to the company and oppose LVMH's interest. The family members have reportedly said they plan to set up a new holding company, which will enable family members to sell their shares without LVMH buying them.
The Hermès family own more than 70 per cent of the company. Analysts said LVMH should be able to raise its stake in Hermès to 25 per cent, but this would be under the threshold required to trigger a takeover.
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