Family-controlled luxury goods company Hermes has said that it wants fellow family business LVMH to reduce its stake in Hermes to less than 10%, according to a report in Bloomberg.
LVMH currently holds a 20% stake in Hermes, which, according to executive chairman Bertrand Puech, is "not normal". He wants LVMH chief executive Bernard Arnault to reduce his stake by more than half to make available the other shares to the open market.
LVMH surprised Hermes in October last year by announcing that it had managed to take control of 20% of Hermes shares through derivatives, raising fear among the family – which hold 73% of the stock – of a potential takeover by its much larger rival. (Continue reading here)
Puech told Bloomberg: "If LVMH doesn't reduce its stake, it means we end up with a shareholder we don't like and we don't want."
However, Arnault (pictured) shows no signs of reducing his share, as earlier this month he had said that he will not be a passive shareholder in Hermes and will not be selling his stake in the Paris-based company. (Continue reading here)
Hermes was founded in 1837 by Thierry Hermes and family member Puech serves as executive chairman, while non-family Patrick Thomas is chief executive. Earlier this month, it announced full-year revenues for 2010 at €2.4 billion, up from €1.9 billion the year before.
Founded in 1987, LVMH is majority owned by the Arnault family through its holding company, Groupe Arnault. It announced a 73% rise in net profit for 2010, to €3.03 billion.
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