Last year, when Bernard Arnault requested Belgian nationality just as France was introducing a 75 per cent wealth tax, he drew the immediate (and understandable) wrath of his countryfolk. Arnault insisted at the time that he was motivated by a desire to settle various long-running legal issues; rather than avoid tax, he wanted to avoid his children being pitched into a court battle over his assets after his death.
Such was the furore, the LVMH man was forced to withdraw the nationality request. Read more
As Luxist blog remarked on Monday: “We’ve been so busy watching the drama as luxury mega-conglomerate LVMH Moët Hennessy Louis Vuitton makes moves on French luxury brand Hermès that we didn’t even see them sneaking up on Bulgari”.
The FT, however, scooped the story, reporting on Sunday night (updated on Monday): Read more
LVMH, the French luxury goods conglomerate, is to take a controlling stake in Bulgari, the Italian jewellery house, in an all-share deal, reports the FT. The agreement, set to be announced on Monday, will see the Bulgari family tender its 51% share in a share swap that will make it the second largest family shareholder in LVMH, the world’s largest luxury goods group. Bulgari was valued at about €2.3bn at Friday’s close, and the LVMH offer would put a significant premium on that figure. A tender offer for the remaining listed shares will also be launched on Monday. Sources close to the deal said the Bulgari family, including brothers Paolo and Nicola, unanimously agreed to a share swap with Bernard Arnault, chairman and CEO of LVMH. DealBook notes the “peaceful negotiations” contrast with LVMH’s battle with Hermès, whose controlling family is fighting off its acquisitive rival.
French luxury-goods giant LVMH has increased its stake in rival Hermès International to more than 20%, increasing tensions in its unwelcome assault on the luxury French fashion house, reports the WSJ. In a Tuesday filing with France’s securities regulator, LVMH said it now owns 20.2% of family-controlled Hermès. On Tuesday, LVMH left the door open to further purchases of Hermès shares, insisting in its filing that its swoop was friendly and that it supported Hermes’ strategy. But the family behind Hermès has expressed doubts about the sincerity of LVMH chairman Bernard Arnault, known for pouncing on family businesses and seizing control. Bloomberg adds that the increased stake may boost speculation that Arnault is gradually targeting a takeover of Hermes.
LVMH, the French luxury goods house controlled by Bernard Arnault, has reaped a paper profit of about €2bn ($2.8bn) from its audacious raid to build a 17% stake in Hermès International, reports the FT. Shares in Hermès rose on Monday by as much as 17% on disclosure of the LVMH interest in the luxury accessories maker. The move seems to have surprised the stock market, Hermès management and the families that control the group. In deals that reinforced Arnault’s image as a canny dealmaker, LVMH added to a long-term stake in Hermès just below France’s 5% threshold for disclosure. But, FT Alphaville asks, how precisely did “the wolf in the cashmere coat” do that?” See also Monday’s Markets Live transcript.
Remember the Volkswagen fruit machine?
Well, the situation developing at Hermes International, following the daring market raid by the Wolf in the cashmere coat, bears something of a resemblance to the short squeeze that developed in the German carmaker two years ago. Read more
They don’t call Bernard Arnault the “wolf in the cashmere coat” for nothing.
The latest master-stroke from France’s richest man is the acquisition of 17 per cent stake in Hermes International at a 50 per cent discount to the prevailing market price. Read more
LVMH, the world’s biggest luxury goods company by sales, has snapped up 17.1% of Hermès International, positioning it to take control of the top luxury brand should the family owners wish to sell, reports the FT. LVMH has bought 15m Hermès shares equivalent to a 14.2% stake, and also holds derivatives, which when converted will give it an extra 2.9%. Industry experts praised the move, in which LVMH paid less than half the market price for the shares through the use of derivatives. The €1.45bn (£1.3bn) cost of the 17.1% stake equates to €80.50 a share, against Hermes’ Friday closing price of €176.20. Lex lauds the deal and wonders how LVMH chief Bernard Arnault got such a bargain. Presumably, “the sellers agreed on the price before the shares almost doubled in 2010”.
French billionaire Bernard Arnault is poised to buy Princess Yachts, one of Britain’s oldest and largest luxury motorboat manufacturers, for an estimated £200m, reports the Daily Telegraph. A consortium comprising Arnault’s investment vehicle, Groupe Arnault, and LVMH, the luxury goods company he runs, have been in advanced discussions to buy the business for several weeks. South African billionaire Graham Beck – whose business interests span coal mining, wine making and bloodstock – appointed advisers at Cavendish corporate finance last year to find a buyer for the company.
Carrefour, the French retailing group, on Thursday announced plans to sell a €3bn chunk of its vast property portfolio through an IPO next year. The decision to float its property subsidiary, Carrefour Property, was announced nearly six months after Colony Capital, a private equity investor, and Bernard Arnault, France’s richest man, took a 9.1 per cent stake in the world’s second-biggest retailer by sales. Lex says Carrefour’s plan seems a “crafty solution” to getting activist investors off its back without wrecking its balance sheet.
Journalists at Les Echos, the FT’s French sister paper, have on their own initiative secured a €245m bid from Fimalac, the Paris-listed owner of the Fitch credit rating agency. The FT Group, the Pearson subsidiary that owns Les Echos and the FT, last month entered exclusive negotiations to sell the French title to LVMH, the luxury goods group controlled by Bernard Arnault. Les Echos journalists protested that their reputation for editorial independence would suffer under LVMH, which was willing to pay €240m for the paper – 24 times Les Echos’ 2006 operating profit.
Vincent Bolloré, the French investor, on Thursday declared that he might bid for La Tribune, the French financial newspaper, were it to be put up for sale by LVMH. The future of the loss-making title has come into question after LVMH entered exclusive talks to buy Les Echos, La Tribune’s profitable rival, from the Financial Times Group, the Pearson arm that publishes the FT. LVMH, which is controlled by Bernard Arnault, France’s richest man, is likely to sell La Tribune if the Les Echos talks end in a deal.
LVMH, the luxury goods group, on Thursday announced it was in exclusive talks to buy Les Echos from Pearson, which owns the FT, in a move strongly opposed by journalists at the French business daily who fear the loss of editorial independence. Les Echos’ editorial staff went on strike on Tuesday in response to reports that Bernard Arnault, LVMH chief executive, was a likely buyer, either through his personal holding company or through the luxury group. Mr Arnault already owns La Tribune, a rival daily business newspaper. LVMH said on Thursday it would seek to guarantee editorial independence at Les Echos.
European credit derivative markets opened on a more bullish note again on Thursday, but some analysts are still warning that the indices could be set for another move wider, increasing the cost of protection, although much depends on the tone of US economic data.
The iTraxx Crossover index of mainly junk-rated European companies tightened by 8 basis points on Thursday to about 212bp, following a 10bp fall on Wednesday, according to traders. This means the cost of protection on €10m worth of the names in the index has now fallen about €36,000 per year over five years from its most expensive point on Monday of €248,000 per year to the €212,000 seen this morning. Read more
The Halley family’s dominance of Carrefour was called into question on Wednesday after it emerged that France’s richest man had teamed up with a US private equity firm to take a stake of nearly 10 per cent in the retailer. To cap a day of upheaval for the group Luc Vandevelde, its chairman, then resigned after falling out with the Halleys, who own 13 per cent of Carrefour’s shares but control 20 per cent of the voting rights. The announcement that Bernard Arnault and Colony Capital had built up a 9.1 per cent stake in Carrefour came as a surprise to the stock market. Mr Arnault is the chief executive, chairman and controlling shareholder of LVMH, the luxury goods group. The pair — acting in concert with Axon Capital, holder of another 0.7 per cent — are now Carrefour’s second-biggest shareholders. Mr Arnault and Colony said their investment in the French company was strategic and industrial, adding that they wanted to work with the Halley family and current management. But what, asks the FT’s European View, is the undisputed king of luxury doing in a hypermarket?
Bernard Arnault, the chairman of LVMH, is understood to be lining up with Endemol’s French management for a bid for the producer of Big Brother. Telefónica, the Spanish group which owns 75 per cent of the Amsterdam-listed company, is preparing to begin a auction within two weeks, and may allow just two rival groups to compete for Endemol, which is valued at €2.74bn. Mr Arnault’s personal investment would lend weight to a bid led by Stephane Courbit, president of Endemol’s French division, and financed by PAI. Their group is expected to face competition from another, led by Jon de Mol, Endemol’s creator, and backed by Goldman Sachs. This group is thought to be working with Apax.