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Hermes Family Asks LVMH and Bernard Arnault to Withdraw

>> Late last month, LVMH stealthily purchased 17.1 percent of Hermes shares, and despite denying any full-on takeover bids, LVMH announced intentions to buy more shares depending on market conditions. Hermes executives are not taking the news lying down.

In a newspaper interview with Le Figaro today, Patrick Thomas, CEO of Hermes International, and Bertrand Puech, who is a fifth-generation heir of Hermes founder, Emile Hermes, and represents the family shareholders, called for LVMH chairman and CEO Bernard Arnault to get rid of his newly-acquired stake. They added that they did not see the shares purchase as "friendly," despite Arnault's assurances that he doesn't plan a hostile takeover. "The family is saying clearly and unanimously: ‘If you want to be friendly, Monsieur Arnault, then you must withdraw’,” Puech added.

Arnault phoned to notify Puech of the stake just hours before issuing a statement, causing him “surprise and displeasure,” he said. Thomas and Puech both met with Arnault last week after the announcement, where they told him face-to-face that they don't consider his overture friendly. “There is nothing friendly about this move. It was neither desired nor solicited,” said Thomas, adding: “It is very probable that he will increase his stake, I don’t know his intentions. This culture [of craftsmanship and strong traditions] is hardly compatible with one of a big group. It is not a financial battle, it's a cultural battle."

Hermes family members still control 73 percent of the firm not currently owned by Arnault and are awaiting the French market regulator's decision on whether LVMH's stake purchase happened legally.

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