Hermes family sets up holding company
The founding family of France's Hermes luxury fashion group said Sunday they had set up a holding company with more than 50 percent of the group's capita in a bid to fight off a takeover bid from LVMH.
The move was subject to the approval of market regulators, a statement from the company added.
About 70 heirs of the six-generation Hermes family business decided on the move at a meeting Friday, called to discuss a hostile takeover bid launched by Louis-Vuitton Moet Hennessy (LVMH), the world's largest luxury goods group.
The family as a whole hold 73.4 percent of the company's shares and so far have said they were agreed that it was not for sale.
But news in October that LVMH had increased its stake to 17.1 percent prompted the family to take steps to protect their position.
The family's shares are divided among more than 60 descendants of founder Thierry Hermes, not all of whom necessarily have the same priorities.
Speculation grew in recent weeks that the family members would take such a step.
On November 9, shortly after LVMH's presence was revealed, Hermes reported sales in the first nine months of the year amounted to 1.67 billion euros (2.18 billion dollars).
Sales for the year were on target to increase by 15 percent, it said.
LVMH employs 77,000 people and has a market value of nearly 60 billion billion euros, compared with Hermes on 16.8 billion euros.
The French stock market authority AMF has opened an investigation into the method used by LVMH to snap up its holding in Hermes. LVMH insists that it acted within the rules.
© 2010 AFP