Hermes Wants LVMH to Cut Stake to Free Up Shares in the Market, Puech Says
Hermes International SCA wants LVMH Moet Hennessy Louis Vuitton SA to reduce its stake by more than half to free up shares on the open market, according to the head of the Birkin bag maker’s founding family.
With the family controlling more than 70 percent of Hermes stock, “it’s not normal” that LVMH Chief Executive Officer Bernard Arnault should hold 20.2 percent of the shares, Bertrand Puech said in an interview in Paris yesterday. “We want him to reduce his stake to less than 10 percent.”
LVMH won’t be a passive investor in Hermes and can provide its Paris-based competitor with strategic and operational help, Arnault said Feb. 4. The world’s largest luxury goods maker doesn’t plan to sell its Hermes stake, Chief Financial Officer Jean-Jacques Guiony said at the time.
If LVMH doesn’t reduce its stake, “it means we end up with a shareholder we don’t like and we don’t want,” Puech said. “Nothing will change” regarding the running of the company.
LVMH announced Oct. 23 it held a 14.2 percent stake in Hermes and derivative instruments for another 2.9 percent that it has since exercised. LVMH acquired an additional 3.1 percent of the company in December.
“There has been no contact” between the companies since Oct. 25 when Puech and Hermes Chief Executive Officer Patrick Thomas met Arnault and LVMH vice-chairman Pierre Gode, Puech said. “We’ve given no instruction to our advisers to meet with LVMH.”
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