Hermes family tightens grip on company
The founding family of Hermes International, the luxury scarves and handbag maker, was granted the right on 6 January to create a holding company to pool family shares without having to bid for the rest of the company.
The decision, which was taken by the French stock market regulator the Autorite des Marches Financiers, gives the family better protection against the unwanted advances of fellow family-owned luxury group Moet Hennessy Louis Vuitton.
Hermes said in a statement that the creation of a holding company is "unanimously wanted to preserve the culture of Hermes".
The family, who controls 73% of the Paris-based company, met in December to set up the holding company, which will control more than 50% of Hermes and have the right to purchase any of the remaining family-owned shares as and when they are sold.
Under French law, once shareholders control over 33% of company stock they must launch a takeover bid for the business. However, the Hermes family was granted a waiver of obligation by the AMF.
The move was opposed by several Hermes minority shareholders. Colette Neuville, head of the minority shareholders lobby group ADAM was cited in the press as being shocked with the decision and would appeal against it.
LVMH surprised the family and the market in October when the luxury group, headed by Bernard Arnault (pictured), announced it had built up a 17.1% holding in Hermes through equity swaps. (Continue reading here) LVMH then went on to announce in December that it has increased its Hermes holding to 20.2%.
The speculation over the future of family control at Hermes began last May following the death of the man often credited with fighting off pressure to sell to rivals, Hermes former family chairman Jean-Louis Dumas.
Dumas was the great-great-grandson of Thierry Hermes, who founded Hermes in 1837.
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