The Competition Between Luxury Group LVMH And Hermes Shares Has Started To Billow Again.

Since luxury group LVMH announced last year to become a luxury family business, Herm s, the two largest luxury brands Buy The storm was once in a hubbub. In order to strengthen control over the family group, Hermes The family recently proposed to withdraw nearly half of its shares and set up an unlisted holding company before the end of this year against LVMH group. stock right Buy.

After the luxury giant LVMH group announced last year that it had become a luxury family business, Herm s, the acquisition of the two luxury brands has been on the brink. In order to strengthen control over the family group, the Hermes family recently proposed to withdraw nearly half of its shares and set up an unlisted holding company before the end of this year against LVMH group's equity acquisition.

With the "Crazy" acquisition and successful commercial operation, Bernard, Arnott, the head of the LVMH group and the world's luxury godfather, has just become the world's fourth richly ranked. Although Arnott's business strategy and adventurous spirit are admirable in some people's eyes, in other people's eyes, he is a wolf in cashmere cashmere sweater. He is called an unpopular opponent by the Hermes family later. In Arnott's eyes, luxury goods are just a business.

This is exactly the opposite of Hermes's philosophy. Like most luxury brands in Europe, the latter is developed by workshop family businesses, emphasizing elegance, handcraft, rarity and brand characteristics. Members of the Hermes family, who are proud of their traditions, are determined to unite against the acquisition of luxury goods giant LVMH.

LVMH group mergers and acquisitions Hermes road map: sneak out

In fact, as early as 2004, Arnott's chairman, LVMH, quietly rolled out acquisitions.

In the same year, the Hermes investor relations department sent a polite courtesy letter to a Hannibal company registered in Luxemburg. As Hermes has found in the daily shareholder registration form, Hannibal owns 0.6% of the company's shares. In his letter, Hermes asked whether Hannibal could make a formal announcement on the change of equity. Since the Paris stock exchange was launched in 1993, Hermes has asked shareholders to make an announcement on more than 0.5% of the equity changes. But at that time, H annibal did not respond to the request of Hermes.

In fact, Hannibal's behind the scenes controller is Arnott. The company's registration data show that it was founded in 1993 and is a subsidiary of Holding Company registered in Russia's Louis Weedon investment company. Equity trading records in 2001 showed that Hannibal invested $81 million at that time and granted a 0.6% stake in Hermes. Louis Weedon said that in 2001, the company also acquired another part of Hermes's stake, making its total holdings of Hermes 4.8%-4.9%. However, LVMH group did not disclose this information at that time.

Since January 2008, the Louis Weedon group has begun to swap shares with three banks. The subject matter of the transaction is close to 13% of Hermes equity. Hermes's share price doubled between 2008 and 2010. When the first swap deal is due to expire in early 2011, the LVMH group said the company realized that if the final cash transaction was completed, a large number of Hermes shares would be sold out in the two market, which would suppress the company's share price and provide Louis Weedon's rival with the opportunity to merge Hermes. This is the explanation that LVMH took for the 13% Hermes shares. Eventually, the LVMH group decided to negotiate with the trading bank to eat the shares held by them.

Considering the low cost of initial shareholding, Arnott's chief counsel, Pierre goldde, once said to the outside world, "this is an incredible opportunity at that time."

The French financial market authority is involved in investigating whether transactions are in breach of securities trading regulations. But no matter what the outcome is, LVMH will not be asked to cancel the deal. Mr. Arnott, chairman of the board of directors of Hermes, also called on Mr. Arnott to reduce his shareholdings to below 10%, but he said he would not sell his Hermes shares and hinted that he would not be a "passive" investor.

Puxi Yong said that until Louis Weedon made a statement in October 23rd, Hermes and Louis Weedon had no contact. Second days after the announcement, the two sides formally met and were still under Arnott's proposal. The meeting lasted only 30 minutes, and everyone was very frank and polite, but the scene was not intimate. When Arnott jokes about whether his wife can jump the queue in the appointment list of the Birkin bag, pussy will never hesitate to respond, "she has to wait like other people."

Hermes deal: lock 50.2% shares

After this meeting, the people of Hermes realized that Arnott had already set eyes on his ancestral career, and they soon moved on.

On the morning of December 3rd of last year, about 50 members of the Hermes family met in a very secret situation near the Triumphal Arch in Paris. In the next 4 hours, the members of the Hermes family agreed to lock in 50.2% of the company's shares through a strict equity custody scheme. According to this plan, the shares listed in it are prohibited from being sold out of the country without obtaining a proportional vote of 75% of the family members. Another 12.6% stake is not included in it to give family members certain reduction of cash space, but once the family members sell this share, the family equity trusteeship fund will enjoy the priority of purchase. This arrangement ensures that even if people plan to sell shares of the company later, it will take at least a few decades to reach more than 75% of the family members' consent. In the meantime, the company will always be under the control of the Hermes family members in the legal sense.

"If we don't take any action, no one will feel at ease." Moya said. "Of course, we also know that Arnott has taken a look at some of the shares held by some of our descendants."

In September 15th this year, the decision of a French court became a major boost for Hermes to fight against the gradual acquisition of LVMH. The judgment agreed that the Hermes family shareholders would set up a new unlisted holding company by the end of the year, and would not have the right to open the takeover price for other shares.

In November 23rd, the Hermes family submitted a document to the French stock market regulation association. Some family members began to sell, sell and sell their shares at the price of 130 euros per share in mid 11, with a total price of up to 400 million euros.

Subsequently, the family members submitted the new company statute to the Paris commercial court. The lawyer said, "all procedures are in place, and the new holding company will be completed by December 15th". The holding company will share the 50.2% shares held by all successors of the Thierry Herm s.

But there are also some other family luxury enterprises showing their willingness to cooperate with LVMH. "The luxury market is becoming bigger and bigger, and competition is becoming stronger and stronger. If you have the opportunity to run these brands on a unified platform, strong financial backstage and global sales network will make the success of the brand more secure. Bao Li Li CEO Francesco Trapani said.

The price of Hermes has increased by 65% since January. The market value of the company is 270 to 28 billion euros, and the P / E ratio is 50 times higher. Industry experts say this will make those who do not want to lock themselves in the cell to sell stock cash. They are familiar with the way to know who has money. In other words, the goal is Arnott, the boss of LVMH.

But it is obvious that the brand of the luxury brand, which has broken away from the family business model, is becoming more and more industrialized, and the original handcraft culture has already subsided. Take Louis Weedon as an example, at present, Louis Weedon is gradually becoming a "luxury" brand of the "public", and the brand's original manual culture, personal style and other factors are very different from before.

The attitude of Hermes is clear: This is not a financial dispute, but a cultural war.

LVMH Group Chairman and chief executive officer Bernard Arnault: "we do not intend to fully control Hermes."

LVMH group vice chairman Pierre Gode: "LVMH group has never taken any measures to influence the stability of the Hermes family, employees or suppliers. I ask those who have been stigmatized about this behavior to produce relevant evidence. The leaders of the LVMH group are rational and wise. We know that the Hermes family owns 70% of the company and we have no chance to control Hermes company. Because of this, we have no reason to undermine the steady development of Hermes. As shareholders, we certainly hope that Hermes will develop better and better. "

Patrick Thomas, chief executive officer of Hermes, "Hermes will become more independent. We will find a solution someday. We are not in war. This is not a financial struggle, but a cultural war. I'm not saying that LVMH is not good, we are good, I just say that they are different from each other, so they do not want to live with them.

Hermes family Puech: "in the past 6 months, we have suffered all kinds of attacks that have not been experienced since the establishment of the company in 174 years."

Episode: the largest private shareholder of Hermes said that self protection is meaningless.

Hermes lawyer told Agence France-Presse that "except Nicolas Puech, all family members have signed all documents. He was the only member of the family who did not attend.

The lawyer said, "this is not surprising. He had already expressed his wish to remain independent. He is going to set up a foundation for his shares.

Nicolas Puech holds nearly 6% of the shares and is the largest private shareholder among family members. He publicly opposed the establishment of a holding company early in the morning, which is of no practical significance to protect Hermes from LVMH. He said, "everyone's freedom is the best guarantee for our long-term unity."

The lawyer emphasized, "Nicolas has never sold shares, nor will it be in the future. He chooses his own path, but still stands with the Hermes family. He will never sell shares to Bernard Arnault. An analyst in Paris told Agence France-Presse that "the key to the family is holding companies holding 50% of the shares. They have achieved this goal now. Whether Nicolas Puech is participating or not, this is not a key factor. "

Timetable for equity disputes:

October 23, 2010: LVMH announced its 17.1% stake in Hermes group on Saturday, but it did not intend to "hold", but wanted to become a "long-term shareholder".

October 24th: the Hermes family expresses solidarity and solidarity and does not intend to sell the company.

October 24th: French financial regulators say they will review the legality of LVMH's takeover.

November 3rd: the Hermes family asked LVMH Arnault Bernard, President of the group, to give up its holdings of Hermes, but was rejected by him.

December 5th: the Hermes family is interested in setting up an unlisted family holding company to assemble more than 50% of Hermes's shares.

December 21st: LVMH group announces a 20.21% stake in Hermes.

January 6, 2011: after Hermes decided to establish a holding company, the French financial regulator agreed that it did not need to open a public takeover price for all the shares of the company.

January 6th: in accordance with the decision of the French financial regulators, the Association for the protection of minority shareholders appeals to the court of appeal of Paris.

May 24th: the Association for the protection of minority shareholders originally wanted to "deprive" members of the Hermes family of voting rights at the shareholders' meeting by prosecution, but was invalidated by the court ruling procedure.

May 30th: at the Hermes shareholders' meeting, the chairman of the board of supervisors Bertrand Puech and vice president of LVMH Pierre God e tit for tat.

July 26th: LVMH announced that the share of Hermes holdings increased from 20.21% to 21.4%.

September 15th: the Paris court of Appeal ruled that the Hermes family would establish a holding company, and there would be no need to introduce an open takeover price for other shares of Hermes.

In November 23rd: the Hermes family submitted documents to the French stock market regulation association. The Hermes family submitted a document to the French stock market regulation association. Some family members began to sell, sell and sell their shares at the price of 130 euros per share in mid 11, with a total price of up to 400 million euros.

Subsequently, the family members submitted the new company statute to the Paris commercial court. The lawyer said, "all procedures are in place, and the new holding company will be completed by December 15th".