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 objected by quoting insider trading claims, collusion, and price manipulation by LVMH and stating that the terms in which LVMH became a stakeholder in Hermes International were not appropriate. However, LVMH slammed back, threatening Hermes to 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 to avert a take-over threat.
French markets regulator AMF has already investigated the claims made by both 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.