The family that controls French fashion house Hermès International is discussing ways to respond to LVMH Moët Hennessy Louis Vuitton SA, which has accumulated a 17.1% stake in Hermès.
The
Wall Street Journal
reported
that Hermès “is considering funneling its shares into an unlisted holding company….. The holding company structure would prevent individual family members from selling their shares to outsiders.”
The family “has hired consultants at French bank BNP Paribas SA and corporate lawyers to help it explore options,” the
Journal
article said.
Hermès is controlled by a limited partnership that is open only to direct descendants of the company founders, the
Journal
report noted. Its bylaws “give the Hermès family decision-making power, even if only one family member were to remain a shareholder.” If an unlisted holding company were to own part or all of the family’s shares, there would be “an extra defense,” the
Journal
article said.
According to the
Journal
report , 47 members of the Hermès family recently met. Sixth-generation chairman Bertrand Puech told the Journal that they voted on whether the family wanted to remain in control of the company; they unanimously voted yes, he said.
The
Journal
report noted:
Several members have sold small stakes, which Mr. Puech says could have ended up in [LVMH head Bernard] Arnault’s hands. Hermès descendant and board member of the limited partnership Laurent Momméja sold 1.8 million euros ($2.5 million) of shares two days after Mr. Arnault’s announcement, according to a fiing with the French stock market regulator. Jérôme Guerrand, the chairman of the supervisory board and another heir, has also sold millions of euros worth of shares in recent years.
(Source:
Wall Street Journal,
Nov. 10, 2010.)
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