Bernard Arnault, the head Louis Vuitton Moet Hennessy has made a career of buying luxury companies. He has acquired several privately or family owned luxury brands and companies. In October when he announced that he had raised his stakes in Hermes International to over 17% it was natural that the family owning the company became alert and started taking preventive action to guard against a hostile takeover bid.
The family initiated a plan to place more than 50% shares of Hermes International in a new holding company. Arnault had contested the legality of the plan but Autorité des Marchés Financiers, the French market regulators clarified that the family could group the shares without having to offer to buy out minority shareholders. Under French law, an investor who acquires more than one-third of a company must make an offer for the rest of its shares. The Hermes family argued that the structural change in the shareholding pattern did not change the ownership.
The regulator said that it has granted the exemption but will explain the reasons in detail later on. The Hermes family on their part said that it was being done to preserve the culture of Hermès. An association of minority shareholders in France said that they planned to appeal against the judgment but the process shall take some time.
Via: dealbook.nytimes, google