Dec 19, 2010
Hermes shareholder does not see delisting
Dec 19, 2010
(Reuters) - A bid to delist French leather bag maker Hermes (HRMS.PA) shares from the stock exchange has its charm but would be very costly, a family shareholder and top manager said in a newspaper on Sunday.
Hermes is setting up a holding company to fend off rival LVMH (LVMH.PA), which in October revealed it had 17.1 percent of Hermes. The new holding needs clearance from French market watchdog AMF that it does not have to bid.
"In effect, we did not go on the bourse, as is usual, to get funding, we don't need it, but to assure family shareholders that their shares were liquid," Guillaume de Seynes said in Italian business daily Il Sole 24 Ore.
De Seynes a descendant of Thierry Hermes, the company's founder, is operational number 2, the newspaper said.
"So the idea has a charm, but as you yourself say, very high costs. And then we have a lot of faithful and happy individual shareholders. We would not like to betray them," he said when asked by Il Sole about a bourse exit.
The buy-out of other shareholders would cost up to 4 billion euros ($5.3 billion), the newspaper said. Hermes has a market capitalisation of 16.6 billion euros.
De Seynes made no comment on the new holding and a special AMF exemption from having to bid for Hermes.
The company says the move does not change control of Hermes. The French Adam minority shareholders association has said it would appeal any exemption granted by AMF that the holding does not have to bid.
In the interview, De Seynes said Hermes has a long-term strategy, which does not involve growth in volumes at any cost and which favours quality and creativity, adding this strategy requires a stable set of shareholders.
(Writing by Nigel Tutt; Editing by Mike Nesbit)
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