Hermès International will pay an exceptional dividend of 5 euros a share, payable in addition to a 2 euro ordinary dividend, “to reflect exceptional performance,”
the
Financial Times
reported.
The luxury-goods company reported a 41% increase in 2011 net profit.
The
FT
report noted that the extra dividend will help the family-controlled company to defend itself against rival company LVMH, which holds a 22.4% stake in the company.
Most of the money will flow to the family which owns 72 per cent of the shares. The family controls Hermès through a limited partnership structure. In December, it also created a 12 billion euro holding company which owns 50.2 per cent of Hermès shares.
The holding company, known as H51, gives family members first right of refusal on share sales, instead of having to sell into the market where LVMH might buy them. One-third of ordinary dividends payable to shareholders stays within the structure and all exceptional dividends.
An analyst told the
FT,
“The exceptional dividend will ensure there is enough liquidity in the family holding.” (Source:
Financial Times,
March 23, 2012.)
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