Twenty members of Hermès International SCA’s founding family have chosen not to put their shares in a new holding company that their relatives established as a defense against LVMH Moët Hennessy Louis Vuitton SA, which owns a 20.2% stake, according to
a Bloomberg News report.
The 20 family members own at least 7% of Hermès, according to the report.
The holding company … will have 50.2 percent of the Hermès shares and at least as many voting rights, in addition to the first right of refusal on another 12.6 percent of shares.
Sanford Bernstein analyst Luca Solca told Bloomberg that LVMH chairman Bernard Arnault may try to exploit divisions among Hermès’s family owners. Solca said:
“The fact that they took the pain to create this holding company in the first place is an indication that the family is less unified than they want us to believe.”
Hermès managing director, Patrick Albaladejo, noted that the family will still have a majority stake and full control of the voting rights, the Bloomberg article said. Analyst Solca predicted that LVMH would raise its stake to more than 25% but said the new holding company strengthens the family’s defense. Solca told Bloomberg:
“To get control of the company, something else will have to happen and this will likely take some time.”
(Source: Bloomberg, Jan. 11, 2011.)
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