THE founding family of France’s Hermes luxury fashion group yesterday revealed it has set up a holding company with more than half of the group’s capital in a bid to fight off a takeover bid from Louis-Vuitton Moet Hennessy (LVMH).
The bold move, which is subject to regulatory approval, followed crisis talks on Friday, when heirs from the six-generation family met to discuss hostile share-buying launched by LMVH, the world’s largest luxury goods group.
LVMH, led by billionaire businessman Bernard Arnault, rattled Hermes in October when it revealed a surprise 17.1 per cent stake in its smaller rival, later saying it wanted to buy more shares.
The family shareholders, who number around 60 and together hold about 73.4 percent of the stock, said they consider Arnault’s move unwelcome and have called for him to withdraw.
The family’s shares are divided among more than 60 descendants of founder Thierry Hermes. “The family’s commitment to create this majority holding is irrevocable,” it said in a statement. “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.
On 9 November, Hermes reported sales in the first nine months of the year amounted to €1.67bn (£1.42bn), with sales for the year targeted to be up 15 per cent.