Hermes protected from LVMH takeover

French regulators decided LVMH is not allowed to takeover minority shares from Hermes stakeholders, ensuring the family will remain in control of the French luxury fashion house under antitrust laws. The family, who controls 73% of the

Paris-based company, met in December to set up a holding company, which will control more than 50% of Hermes and have the first right to purchase any of the remaining family-owned shares as and when they are sold.

Under French law, once shareholders control over 33% of company stock they must launch a takeover bid for the business.

The move Hermes follows the surprise announcement in October 2010 that fellow family-owned luxury group Moet Hennessy Louis Vuitton had built up a 17.1% holding in Hermes through equity swaps. LVMH went on to announce in December that it had increased its holding to 20.2% of the luxury bag and saddle maker.

LVMH has said it is not interested in acquiring Hermes, but this has done little to placate the family who have repeatedly made statements defending their ownership of the company.

The speculation over the future of family control at Hermes began last May following the death of the man often credited with fighting off pressure to sell to rivals, Hermes former family chairman Jean-Louis Dumas.

Dumas was the great-great-grandson of Thierry Hermes, who founded Hermes in 1837.

Image: Hermes SS11