Hermes moves to fend off predators
Hermes, the French luxury products company controlled by descendants of the founder, has moved to set up a holding company to fend off any advances from larger rival LVMH Moet Hennessy Louis Vuitton.
Family members met 4 December to set up a holding corporation, which will control more than 50% of the company. The holding company will also have the first right to purchase any of the remaining family-owned shares.
Nevertheless, the plans to create a holding company remain subject to approval by French stock-market authorities.
The 70-plus family members control around 74% of the Paris-based company.
The move comes after the raid on Hermes shares by larger, family-controlled rival LVMH, which managed to gain control of 17.1% of the famous saddle maker in October. (Continue reading here)
LVMH says it is not interested in acquiring Hermes. But that hasn't placated the family, who have made repeated statements defending their ownership and saying they have no intention of losing their majority shareholding.
"The family's commitment to create this majority holding is irrevocable," Hermes said in its latest statement with the holding company initiative. "This new firm will benefit from preferred rights on the remaining stock owned directly by the family."
It added that the operation would have no effect on the family's stake in Hermes International.
Shortly after the LVMH raid, Hermes reported sales in the first nine months of the year amounting to €1.67 billion, with sales for the year targeted to be up 15%.
Bertrand Puech is executive chairman of Hermes and is also a family member, whereas the chief executive, Patrick Thomas, isn't related to the family.
The speculation over the future of family control at Hermes grew after the death last May of the man often credited with fighting off pressure to sell to rivals, Hermes former chairman Jean-Louis Dumas.
Dumas was the great-great-grandson of Thierry Hermes, who founded Hermes in 1837.
At 63, Thomas was viewed by many as too old to take the company forward and deal with competing shareholding interests among family members.
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