Paris Prosecutor Opens Investigation After Hermes Complaint Against LVMH - Official
October 12 2012 - 02:20PM
Dow Jones News
By Nadya Masidlover
PARIS--The Paris prosecutor's office has decided to open a
preliminary investigation following the complaint filed by Hermes
International SCA (RMS.FR) against LVMH Moet Hennessy Louis Vuitton
SA (MC.FR, LVMUY) regarding tactics used by the larger luxury-goods
company to accumulate a stake in Hermes.
"A preliminary investigation has been opened in order to assess
the content of the complaint," an official at the Paris
prosecutor's office said late Friday.
The investigation--which follows a complaint filed by Hermes in
July for insider trading and share-price manipulation--is the
latest episode in an ongoing battle between Hermes and its
uninvited shareholder and larger rival, LVMH.
The row between the two luxury-goods purveyors dates back to
October 2010, when LVMH revealed it had amassed as much as 17% of
Hermes for a total of 1.45 billion euros ($1.8 billion). LVMH
accumulated the stake using derivative instruments called equity
swaps purchased from banks over a couple of years. In October 2010,
it amended the equity-swap contracts to deliver shares instead of
cash and in one fell swoop said it had passed various ownership
thresholds that required public disclosure.
Write to Nadya Masidlover at nadya.masidlover@dowjones.com
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