Louis Weedon's Acquisition Of Hermes Shares Is Punished.

< p > French < a href= "http://www.91se91.com/news/index_c.asp > > luxury goods < /a > manufacturer Louis Weedon group issued a press communique on 3 th and decided to accept the 8 million euro ticket issued by the French financial market authority in June this year on the Hermes equity dispute.

This is not a failure for LVMH, but a setback in the acquisition of Hermes, and the acquisition of Gucci was a real failure.

< /p >

The battle between Hermes and Louis Weedon group began three years ago. In October 2010, Louis Weedon suddenly announced that he had owned 17.1% of the family controlled Hermes and became the largest single shareholder outside the Hermes family heir.

Before that, Hermes was totally ignorant of all this.

The Hermes family launched a counterattack immediately. In December 2010, Hermes announced that it would assemble more than 50% of the Hermes family heirs to form a holding company. The holding company would collect more than 50% of its family heirs and have preemptive rights for the family owned shares.

Rely on "family solidarity" to deal with the possible takeover actions of Louis Weedon group.

< /p >

< p > in July this year, when LVMH group announced its semi annual consolidated financial statements, it announced that it would increase its holdings to 23.1%. So far, only about 6% of the shares of the Hermes family were not in the hands of LVMH.

The increase was held by LVMH group since 2010, when the Hermes family adopted "family solidarity" to resist mergers and acquisitions for the first time. The struggle between LVMH and the Hermes family continued.

Some analysts believe that LVMH will always hold Hermes shares until the Hermes business is in trouble or chaos in the Hermes family will emerge again.

The fine of 8 million euros is only a small part of the LVMH acquisition.

< /p >

< p > since the merger of MOET & CHANDON Hennessy and Louis Weedon in 1987, it has been active in the luxury market as a M & a magnate. In 1987, there were only two brands in Louis Weedon's market. In 2012, LVMH group brought together more than 60 luxury brands, such as Bvlgari, Dior, Givenchy and Fendi, and more than half of the brands came through mergers and acquisitions.

In 2010, Arnott controlled nearly 60 prominent luxury brands.

Since 1987, LVMH has made 63 acquisitions, holding 74 companies and selling 48 companies at the same time.

< /p >

Since 1987, P has made 62 acquisitions. The essence of LVMH has been followed by the merger and acquisition established in the first battle in 1987: or the use of the economic cycle in the trough, or the intensification of family conflicts, or the use of capital structure or system to design loopholes, so as to select "goods for convenience".

Japanese fashion Kenzo purchased in 1993, French perfume and cosmetics Guerlain (Guerlain) in 1994, French leather brand Loewe and Celine in 1996, retail stores in 1997, DFS and Sephero, Swiss watch and Hoya, Italy leather Fendi for 1999-2001 years, to 1999-2000 year French wine Chateau Yquem, 2001 American fashion Donna Karen, 2008 Spain's distilled liquor, and watch brand Heng Bao and wine brand, all of which were completed by the super low price of the brand sales.

< /p >

< p > but even if the smart a href= "http://www.91se91.com/news/index_c.asp" > LVMH < /a > chairman Arnott, in the M & a market can also remain unbeaten, Gucci has been the pain of Arnott's heart.

< /p >

For more than a decade, Gucci has been a strong rival of LVMH for P.

Arnott has long had the idea of "editing", but he seems to have more heart than others -- he will get the best benefit at the lowest cost.

In January 5, 1999, LVMH bought 100 thousand shares of Gucci group at a price of $55.84 / share, holding a stake of over 5%, reaching the requirements for filing with the Securities Regulatory Commission of the United States and Holland.

In January 12th, LVMH repurchased 631 thousand shares of Gucci group shares at a price of $68.87 per share, raising its shareholding ratio to 9.6%.

By January 16th, when LVMH submitted its 13D documents to the SFC, its shareholding ratio had reached 26.6%, and its shareholding ratio rose to 34.4% in January 25th.

In a short span of 20 days, LVMH spent a total of $1 billion 400 million to acquire Gucci group's stake.

And the process is quite smooth. The Gucci group is not in the least defensive. LVMH has made full use of the loopholes in Holland's laws: it does not require the acquisition to submit detailed acquisition plans to all shareholders, while the laws of the United Kingdom, Italy and France require the acquirer to submit a detailed acquisition plan.

< /p >

< p > in the face of this situation, Gucci asks for LVMH to buy Gucci wholly.

Arnott refused.

The reason is simple: all acquisitions cost a lot of money.

Arnott hopes to achieve the goal of killing two birds with one stone by holding Gucci: on the one hand, controlling Gucci at a small cost, thereby restraining the strong competition of Gucci, and on the other hand, obtaining considerable profits from this investment.

< /p >

< p > Arnott has miscalculated this time.

After being rejected by LVMH, Gucci management decided to use the killer trick: expand capital stock and sell 42% of the total share capital to $3 billion for sale to Arnott's French compatriot PPR, which was changed to Kering group at the beginning of this year.

After the expansion, PPR became the largest shareholder of Gucci, while LVMH's share in Gucci was diluted from 34% to 20%.

Moreover, Gucci also reached a strategic agreement with PPR to ensure the independence of Gucci and continue to develop multi brand strategy.

< /p >

The action of < p > a href= "http://www.91se91.com/news/index_c.asp" > Gucci < /a "annoyed Arnott.

He sued a Holland court for investigation.

Arnott said that Gucci's original president and CEO Domenico De Sol had different words and deeds, did not require PPR company to acquire Gucci 100%, but put Gucci under the control of PPR, which damaged the interests of shareholders of Gucci company.

LVMH even hinted that DeSol changed its mind because he had a secret gentleman agreement with PPR: after PPR agreed to be a major shareholder of Gucci, DeSol and Gucci designer Tom Ford (TomFord) would get a huge stock option.

< /p >

< p > May 27, 1999, the court of appeal of Holland made a final judgment: first, the establishment of Stichting by Gucci group was improper; second, the Gucci group issued a large number of shares to PPR, which was improper in behavior, and Gucci group violated the provisions of the eighth eighth articles of the civil code, which stipulated that the company must act in accordance with the principle of "reasonable and proper".

The result seems to be good news for LVMH.

However, the court did not decide to withdraw the paction between Gucci group and PPR.

LVMH appealed to the Supreme Court of Holland.

LVMH invited the Holland investor Association and the French protection small investors association to help. The latter believed that the issue of shares to Stichting and PPR must be submitted to the shareholders' meeting for vote.

However, it didn't help, because Investcorp's related arrangements in 1995 made the issue of shares of Gucci group authorized by shareholders.

< /p >

< p > October 2000, the Supreme Court of Holland held that the decision of the court of appeal of the court of appeal was not legal after the formal investigation. Therefore, LVMH applied again to the court of appeal to form an investigation team to conduct an investigation. In March 2001, the court of appeal agreed that in September 2001, the investigation team made the findings.

After repeated consultations, LVMH finally agreed to pfer the shares of Gucci group to PPR.

The specific steps are as follows: first, PPR will buy 1/3, or 8 million 579 thousand and 337 shares, of LVMH holding Gucci group shares at the price of US $94 / share, so that PPR owns more than 50% of Gucci group's shares.

The second step is that in December 2003, the Gucci group distributed a special dividend of $7 / share to all equity other than PPR.

In the third step, PPR bought all the remaining shares at the price of US $101.5 / share in April 2004.

The final paction price is $94 / share (removing 7 US dollars / share dividend).

The total cost of PPR's acquisition of Gucci group is US $8 billion 800 million.

< /p >

In the process of obtaining the equity of Gucci group, PPR helped p to buy other luxury brands, and made PPR jump from one retailer to the third largest luxury group in the world. It competed fiercely with LVMH in all aspects.

< /p >