LVMH to distribute Hermes shares to its shareholders; Hermès stock tanks
Sep 3, 2014
French luxury firm LVMH Moet Hennessy Louis Vuitton, said on Wednesday it woulddistribute all its Hermès shares, about 23 percent, to its shareholders, on the understanding that Christian Dior, LVMH's largest shareholder, would in turn distribute the Hermès shares it receives to its own shareholders.
The action follows the proposal by Franck Gentin, the President of the Commercial Court of Paris, to the company and its peer Hermès International, a conciliation to end the conflicts between the two groups and restore a climate of positive relations between them.
The two parties reacted favorably to this proposal and signed an agreement. Shares of Hermès tanked on the news. The agreement brings to an end the conflict between LVMH and Hermès, and all related actions, between them that lasted around four years.
LVMH, Dior and Groupe Arnault have undertaken not to acquire any shares in Hermès for the next five years. The distribution of Hermès shares, approved by the boards of LVMH and Dior, will be completed by December 20.
Following this distribution, Groupe Arnault will hold around 8.5 percent of the capital of Hermès International. Hermès's Co-CEO Axel Dumas and LVMH's CEO Bernard Arnault expressed their satisfaction that relations between the two groups have now been restored.
LVMH rose 2.8 percent to 136.80 euros in early morning trade, while Hermès declined 10.8 percent to 234.35 euros. (DPA)