Bernard Arnault couldn't stay out of the fray much longer. On July 21, the chief of LVMH resigned from Guinness' board in order to pursue his three-way merger proposal for LVMH, Guinness, and GrandMet. His goal: to create a wine-and-spirits giant out of GrandMet's International Distillers & Vintners, LVMH's Mot Hennessy, and Guinness' United Distillers--though Guinness and GrandMet are pursuing a merger of their companies without LVMH.
Resigning from Guinness made it easier for Arnault to sell some of his 14.2% stake. He is using the proceeds to buy more GrandMet stock, bringing LVMH's GrandMet stake to 11.05%. That gives him enough shares to demand a shareholders' meeting to consider his three-way merger proposal ahead of the meeting planned to consider the Guinness-GrandMet plan.
A Guinness spokesman says: "We are confident our shareholders will vote for our proposal." But if Arnault prevails on GrandMet, life could be difficult for Arnault's former chums at Guinness.