Hermes and LVMH row over stakes kicks off again
France’s leading luxury retailers- Hermes and LVMH have gotten themselves knee-deep into a wrestle once again over LVMH’s aggressive stake-building in the company. The initial stake of LVMH in Hermes was about 14.2 in 2010, which has now shot up to a good 22 percent making it a matter of obvious concern for the latter. Hermes raised an objection by quoting claims of insider trading, collusion and price manipulation by LVMH and stating that the terms in which LVMH became a stakeholder in Hermes International was not appropriate. However, LVMH slammed back, threatening Hermes that it will file a counter-claim alleging slander, blackmail and unfair competition. Hermes took a safe side contingency of creating a new holding company controlling 52per cent of Hermes’ shares in order to avert the threat of a take-over.
French markets regulator AMF has already investigating the claims made by both the parties. LVMH goes on to defend itself by strongly reaffirming that the acquisition of its stake in Hermes was entirely legitimate. Well, at least it’s clear now that LVMH’s benevolent intention of “helping in the preservation of the family and French attributes of the famed brand” was a rip off for the sake of aggressive acquisition.