Hermès shares came tumbling down, the most in nine months, prompted by the court ruling. Bloomberg reports that shares fell as much as € 20.25, or 7.6 per cent, to € 248.05 in Paris, the steepest drop since December 3.
A Paris court last week rejected an appeal by minority investors who opposed a decision by the French market authority waiving rules to allow the company’s founding family to set up a holding company.
The family, who are keen to protect their much-loved Birkin started to get worried after LVMH began purchasing shares in the company. LVMH now have a 21.4 per cent stake in Hermès.
“When the holding company is in place, it will become completely obvious that the claims of unity that have taken place for months and have been questioned will be impossible to challenge anymore,” Deputy Managing Director Patrick Albaladejo told Bloomberg in a phone interview. “This is a decisive step.”
Hermès wants LVMH to reduce its stake by more than half to free shares on the open market, according to Bertrand Puech, who heads the bag maker’s founding family. Even if LVMH doesn’t reduce the holding, Hermès will run the company as it sees fit, Puech has said.
“The creation of this company, which will take place in the coming weeks, will reinforce durably the independence of the Hermès group.” The family said in an emailed statement.
LVMH has said in the past that it wasn’t interested in taking over the company or to obtain a board seat, but who wouldn’t want to have the lux company in their portfolio? We sure would.
Image credit: handbago.com
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