Richemont launches pounds 1bn bid to buy remainder of Vendome

Richemont, the Swiss-based conglomerate owned by South Africa's wealthy Rupert family, has launched a pounds 1bn cash bid to buy out the minority shareholding in Vendome, which owns some of the world's most glamorous luxury brands, including Dunhill, Cartier, Mont Blanc and Chloe, Stella McCartney's Paris fashion house.

Richemont, which already owns 70 per cent of Vendome, is offering 495p a share for the remaining 30 per cent, valuing Vendome, quoted in London and Luxembourg, at pounds 3.45bn.

The price is a 26 per cent premium to the shares' pre-bid value. Vendome's shares closed 79p higher yesterday at 472.5p.

Though Johann Rupert, chief executive of Richemont, is hoping for a recommendation from Vendome's board, he said that the company may decide not to proceed with the offer if the world's financial markets collapsed further and threatened Vendome's markets.

However, speaking at the group's interim results, Joseph Kanoui, Vendome's chairman, said the financial turmoil had not affected the spending habits of its wealthy customers.

Mr Rupert expects the deal to go ahead smoothly. He said: "This is a generous premium for the minority shareholders. We only approached the board yesterday. We wanted to give them an opportunity to announce their half-yearly results without being prejudiced by a deal. That strategy cost us 60p in one day."