LVMH, the world’s leading luxury retailer, said on Saturday it had taken a 14.2 percent stake in Hermes, but denied it wanted to take over the French luxury goods firm.
The company controlled by French businessman Bernard Arnault said it wanted to boost the stake to 17.1 percent at a total cost of 1.45 billion euros (US$2 billion) but was not seeking even representation on the Hermes board.
The move makes LVMH the largest Hermes shareholder after the heirs to the family share of around 70 percent.
There has been speculation about the future of Hermes, known for its fine leather goods and silk scarves, since the death in May of its charismatic head Jean-Louis Dumas.
In a statement, LVMH said it holds 15,016,000 shares of Hermes International, with the objective “to be a long-term shareholder of Hermes and to contribute to the preservation of the family and French attributes which are at the heart of the global success of this iconic brand.”
It added that “LVMH fully supports the strategy implemented by the founding family and the management team, who have made the brand one of the jewels of the luxury industry. LVMH has no intention of launching a tender offer, taking control of Hermes nor seeking Board representation.”
The statement said LVMH also holds derivative instruments over 3,001,246 Hermes shares and intends to request their conversion.
“LVMH would then hold a total of 18,017,246 Hermes International shares, or 17.1 percent of its capital. The total cost of this shareholding would, in this case, be 1.45 billion euros,” the statement said.
Previously LVMH owned less than 5 percent of Hermes shares, the threshold beyond which shareholders must declare themselves.
About 20 percent of Hermes’ capital was floated in 1993. The rest was until now controlled by the family, about 40 people, and the company’s management.
A few weeks ago, the head of Hermes’ supervisory board Jerome Guerrand sold 24,257 shares for 4.14 million euros, or about 0.02 percent of the company’s capital. It was not known who else sold shares to Arnault and LVMH.
Arnault reportedly paid 80 -euros a share for LVMH’s slice, while Hermes shares were at 176 euros at close on Friday.
“It’s a magnificent brand, with incredible savoir-faire, we’d rather LVMH invest in it than someone else,” a source close to the deal said.
“It’s a very well-managed company, which got through the crisis without problems, there’s no reason to change anything in its strategy,” a luxury goods sector analyst said.
The analyst said that Arnault wanted to “shelter this family company, by protecting it from a foreign group taking control.”
The luxury products sector has shown strong growth since the beginning of the year after the global slump hit their business badly last year.
LVMH, which counts among its brands Givenchy, Dior and Guerlain perfumes alongside Moet and Chandon and Dom Perignon champagnes, said on Oct. 14 its sales had risen sharply, driven largely by Asia and by demand for champagne.
In July Hermes reported a near 23-percent surge in first half sales and doubled its revenue forecast for the year, with Asia continuing to be the driver.
Gogoro Inc (睿能創意) yesterday launched its first electric bicycle, the Gogoro Eeyo 1, in Taiwan, after unveiling the bike in New York in late May and in France on Tuesday. The company said it would also introduce the series in other European countries such as Germany and the Netherlands. The “Eeyo project” is the fourth of Gogoro’s eight projects that concentrate on smart transportation, which includes Gogoro’s electric scooter, battery swap system and electric scooter sharing service, company founder and chief executive officer Horace Luke (陸學森) told a media briefing in Taipei. “There are various types of city commuters. We will not
EXPERIMENTAL DRUG: While news about a COVID-19 vaccine is more eye-catching, developing a treatment would be more viable, the Senhwa boss said Senhwa Biosciences Inc (生華科) aims to raise NT$1.5 billion (US$50.57 million) by issuing 15 million new common shares in the third quarter of this year to fund the research of new drugs, including the experimental drug Silmitasertib for the treatment of COVID-19, the company said on Monday. That would be the firm’s largest fundraising effort after it raised more than NT$1.4 billion from an initial public offering on the Taipei Exchange (TPEX) in April 2017, chief financial officer Sarah Chang (張小萍) told the Taipei Times by telephone. The price of the new shares would depend on the firm’s average share price
NOT A PANACEA: Offering 5G services would not solve the problem of declining telecom incomes, chairman Sheih Chi-mau said, expecting a flat 5G telecom revenue Chunghwa Telecom Co (中華電信) yesterday became the nation’s first telecom to debut its 5G services, offering tiered tariffs that include a threshold of NT$599 and flat rates, as it aims to switch half of its subscribers to the 5G network within three years. Subscribers would have unlimited data transmission for monthly fees starting at NT$1,399 — the same flat rate as when the company launched its 4G service in 2014 — and they can subscribe to the highest-rate plan for NT$2,699 per month for faster data transmission speeds and larger bandwidth, the company said. Data transmission speeds would be within the range
ROW: A probe would determine if the rights of shareholders who were not allowed to vote yesterday had been violated, while the stock exchange also wants answers The election of board directors yesterday at Tatung Co (大同) sparked controversy after the company blocked some institutional and individual shareholders from participating in the general shareholders’ meeting, prompting the Financial Supervisory Commission (FSC) to announce that the vote would be investigated. Lin Kuo Wen-yen (林郭文艷) was re-elected as chairwoman of the household-appliance maker’s nine-member board, but prior to the vote she announced that several shareholders would not have voting rights. They were being denied a vote because they had contravened the Business Mergers and Acquisitions Act (企業併購法), and the Act Governing Relations Between the People of the Taiwan Area and