Hermès Proposes New Tactics to Prevent LVMH Takeover

LVMH now owns 22.3 percent of Hermès and the Hermes family is doing whatever they can to prevent that percentage from rising. Ever since LVMH bought a huge stake in Hermès in 2010, Hermès, an old luxury label rooted in craftsmanship and tradition, has worried about a hostile takeover by the French conglomerate. Shortly after the purchase, Hermès essentially told Bernard Arnault to back off, saying it was a "cultural battle," not a financial one. Last year, Hermès created a separate family holding company that controls over 50% of shares and protects them from LVMH. And now Hermès has made another move to protect themselves.
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LVMH now owns 22.3 percent of Hermès and the Hermes family is doing whatever they can to prevent that percentage from rising. Ever since LVMH bought a huge stake in Hermès in 2010, Hermès, an old luxury label rooted in craftsmanship and tradition, has worried about a hostile takeover by the French conglomerate. Shortly after the purchase, Hermès essentially told Bernard Arnault to back off, saying it was a "cultural battle," not a financial one. Last year, Hermès created a separate family holding company that controls over 50% of shares and protects them from LVMH. And now Hermès has made another move to protect themselves.
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LVMH now owns 22.3 percent of Hermès and the Hermes family is doing whatever they can to prevent that percentage from rising.

Ever since LVMH bought a huge stake in Hermès in 2010, Hermès, an old luxury label rooted in craftsmanship and tradition, has worried about a hostile takeover by the French conglomerate. Shortly after the purchase, Hermès essentially told Bernard Arnault to back off, saying it was a "cultural battle," not a financial one. Last year, Hermès created a separate family holding company that controls over 50% of shares and protects them from LVMH.

And now Hermès has made another move to protect themselves. At the annual shareholders meeting next month, they'll propose a statute that requires that all shares exceeding 0.5% be registered to the shareholder's name so that the family can easily monitor all acquisitions. They also plan to propose naming Nicolas Puech, the single largest family shareholder, as the 11th member of the board.

Even though LVMH has never confirmed any intent to takeover Hermès, speculation of such a takeover has apparently helped Hermès shares rise 8.2 percent since the beginning of the year, WWD is reporting. But, again, it's not a financial battle, it's a cultural one. And Hermès isn't backing down.