LVMH Moet Hennessy Louis Vuitton chairman Bernard Arnault is set relinquish most of his $7.5 billion holding in luxury-goods maker Hermes International, ending a long-standing battle between the two. Following intervention by a French court, LVMH will distribute the 23 percent stake to its shareholders and institutional investors, almost four years after the world’s largest luxury-goods company started building the holding without Hermes’s knowledge via equity swaps, according to Bloomberg. Arnault has maintained LVMH’s investment was peaceful and that it had no intention of assuming control.
The move rallied descendants of founder Emile Hermes to pool their shares in a holding company to protect against a full takeover and sparked legal action as well as demands that Arnault reduce the shareholding. The distribution of the stake, due to be completed by Dec. 20, will leave the billionaire’s family holding company Groupe Arnault with an 8.5 percent interest, Paris-based LVMH said. According to sources, the resolution will boost the proportion of Hermes shares that are freely traded to more than 20 percent from about 7 percent and reduces “the speculative appeal of Hermes which goes back to being a normally traded company."
Christian Dior, LVMH’s largest shareholder, will give the stock to its own investors. LVMH, Groupe Arnault and Dior have agreed to buy no more shares in Hermes for the next five years.