The French market regulator approved plans for the creation of a family holding company that will control Hermès International, according to
a
Wall Street Journal
report.
Hermès’s family owners are seeking to defend their company against rival LVMH Moët Hennessy Louis Vuitton SA, which has acquired a 20% stake in the company. LVMH boss Bernard Arnault “has said his intentions are friendly and that he doesn’t plan to take control of Hermès, but he has a reputation for pouncing on family-owned enterprises,” the
Journal
article said.
The family needed the approval of the French market watchdog … to create the holding company, regrouping at least 50% of the company’s shares, without launching a buyout of minority shareholders. The family argued that, with 73% of shares scattered among them, they already have de facto control and the holding company is merely a reclassification of its stake.
The
Journal
article said a French minority-shareholder advocacy organization protested the decision because it puts minority shareholders at a disadvantage.
A limited partnership, only open to direct descendants of Hermès founder Thierry Hermès, is already in place. The holding company would have the first right of refusal on any shares being sold by a family member, thus keeping additional shares out of the hands of Mr. Arnault.
(Source:
Wall Street Journal,
Jan. 7, 2011.)
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