Hermes rallied against the arrival of Bernard Arnault

The dramatic entry of LVMH capital of Hermes ignited the stock price of cowhide. Already at record levels, the stock closed up 15%, to 202.85 euros, valuing the company at over 21.4 billion euros!

Investors seem to focus on strengthening the position of world leader in luxury, which revealed Saturday it had got hold 17.1% stake. An arrival presented as friendly. But not really taste of Hermes leaders, meeting in extraordinary council on Monday, who disliked to be told only an hour before the news release of LVMH.

In another communiqué, they curtly said "unsolicited movements on capital". Sunday, they had ensured that "no plan to sell capital is considered significant.Reaffirming that the heirs of the founder families still hold "almost 75% of capital," the company stated that no member of the dynasty has sold its shares to LVMH, otherwise a very marginal payday loan in 1 hour. The family can confirm his "perfect unity" against the intruder.

LVMH will shortly notify the Financial Markets Authority (AMF) entry to the capital. The law requires statements of crossing a threshold from 5% stake. The statutes of Hermes even require such notifications from 0.5% of capital. However, Bernard Arnault said nothing before he took 14.2%, and an option on 17.1%."We do not understand, we had no warning," Patrick says Albaladejo, deputy general manager of Hermes.

Crossing the threshold

"There really is a circumvention of transparency that must be addressed at the regulator," growls Colette Neuville, president of the association of minority shareholders. The AMF has announced its intention to verify if the "regulation" was "respected." LVMH said on Monday that "it has complied strictly with market regulations."

Since August 2009, a statement of threshold crossing to the AMF is binding upon a person or entity "is entitled to acquire shares at its sole discretion, immediately or over time, by virtue of agreement or financial instruments, like futures or options.

LVMH acquired its interest to the average level of 80 euros, which suggests that its investments are several years old. They have largely been achieved through complex financial instruments, and in a manner allowing the group to escape the new requirements of the AMF 500 payday loan .

Remains to be seen what LVMH will be able to do this without the possibility of minority control. "This is a strategic approach to long term, analysts said HSBC.LVMH knows he can not much without the agreement of members of the fifth generation, committed to the independence of the company. But LVMH takes a stand for when the sixth generation will inherit control and may have a different opinion. "

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October 26th, 2010 in business, economics, opinions, publications, special | tags: , , , ,