(challenges) The Secret History of the peace signed between LVMH and Hermes

The Secret History of the peace signed between LVMH and Hermes

Bernard Arnault and Axel Dumas buried the hatchet Tuesday night after a rare and rich conflict turmoil. But the agreement seems to satisfy both parties.

It is more than 22 hours when Axel Dumas, president of Hermes and Bernard Arnault, CEO of LVMH found Tuesday, September 2 in the office of Frank Gentin, President of the Commercial Court of Paris to sign the agreement to be buried near four years of fighting. Frank Gentin is a veteran of difficult cases. He worked this summer on the Vivarte folder and also managed the conflict between the Casino and Galeries Lafayette on Monoprix . This is the first time the two men met Axel Dumas had so far refused to meet with the boss of LVMH. The meeting will be short, the respective boards with all marked during the weekend.

A few hours before the signing, it is the boards of Dior and LVMH, which had given the green light to this extraordinary operation. Bernard Arnault group that has over 23% stake in its rival will distribute all of its shares to its shareholders Hermes and agrees not to purchase securities for five years.

The transaction was structured so as not to destabilize the course of the Hermes share to its shareholders and is committed not to buy new titles for five years. The normalization of relations between the two groups will result in a distribution to shareholders of LVMH shares worth 6.4 billion euros. Groupe Arnault, the holding company of Bernard Arnault heritage will end up ultimately with 8.5% stake in Hermes. This transaction will enable Hermes to a more normalized floating for a company of this size it will increase from 7% to 22%.

The frustrated ambitions of luxury giant

Bernard Arnault is the epilogue of a soap opera that will have spilled much ink. Although LVMH ensures repeatedly that he did not want to take control of Hermes, this message of kindness was never taken seriously audible. In 2010, the Hermes family is still in shock over what she saw as an "intrusion".

LVMH announces first have to be 17% a few weeks later hold more than 20%, then 23%. Everyone is convinced that Bernard Arnault will eventually control of the house and that it is not just a financial investment operation.

By a massive entry of Hermes Capital, Bernard Arnault hope then recompose family ownership as it proceeded at Carrefour. But the three family branches that make up the ownership of Hermes and who were not always on the same wavelength this common enemy sees the new engine of their unit. Within weeks, they build a fortress, a holding company that controls 51 H locks almost all holdings homes.

Hermes works his communication. It arises first victim, a classic mode. Then changes gear ratio and attack his opponent strategically systematically opposing Hermes Vuitton, the culture of premium craftsmanship than mass production, sustainability in the ephemeral. In short, the legitimate and the other brand. It's more subtle. In the opinion, the message is getting through. LVMH sends against-fires, organizes events like The Special Days but the damage is done.

A record high legal risks

Then comes the sequence of judicial proceedings. And that includes the AMF detailing in public, the complex issue of LVMH stake in Hermes. "We realize that the ongoing legal proceedings are not well understood by the media, said a friend of Bernard Arnault, some media are quick to write that we are condemned for insider trading while it is of lack of information. "

LVMH will pay 8 million euros fine but will waive appeal. In the entourage of Bernard Arnault some already argue for release. There are rumors of a sale of the stake to LVMH Qatari fund. The intent is taken seriously enough that beginning in July 2012, Patrick Thomas go to the Economy Minister, Pierre Moscovici to alert him of the threat to the capital of Hermes.

Any sentence of the opponent is peeled and may give rise to claims for defamation. It is July 2012 and the time is not yet warming. Hermès H 51 system is fully operational. But it also shows its limits. Monetization of securities Hermes is not so simple: the volumes are limited by operation. And the treatment is not as fast as a conventional sale on the market. Some family shareholders, who are not parties abroad should also note that the title, because of the speculative premium for the participation of LVMH, is overvalued and that their wealth tax jumped.

At the time of interim results in late August 2013, Patrick Thomas who has for the last time, opens a gap: it asks LVMH to reduce its stake "below 15% would be better," suggests does -there with his characteristic frankness. The message is received in the face. But for now, the criminal case is under investigation while the Commercial Court receives another complaint. Letters rogatory are launched in Switzerland.

"No losers, no winners"

At LVMH , the focus is on changing governance in January Axel Dumas succeeds Patrick Thomas. But requests for appointments are routinely rejected. In early summer Hermes asked the Commercial Court to defer consideration of the complaint and to await the outcome of the criminal proceedings. But the Commercial Court refuses. Initial feedback letters rogatory are meager.

Hermès we realize that the litigation could be very long. Avenue Montaigne, the scenario of an assignment begins to be concocted in late July, with full budget meeting. Bernard Arnault does not usually take a step back, but from the moment he masters the timing and the transaction is financially beneficial to shareholders, you must not hesitate.

Hermes is relieved by the call from Frank Gentin offering mediation but wants to take the time to study the proposal. It mobilizes the office of his lawyer Philippe Ginestié faithful who will be working all weekend on the diagram. The next time a valid topic boards and the various communicating each party agree to a minimum communication on the subject: "no crowing, no loser or winner." Reconciliation between Bernard Arnault and Francois Pinault were made ​​around the dinner table. "We will wait for the ink to dry some agreements," said a relative.

(BFW) *IMMOFINANZ SELLS EU375M BONDS EXCHANGEABLE INTO BUWOG SHRS

{BWO GY Equity DES }


BN 09/04 06:48 *IMMOFINANZ BONDS TO HAVE COUPON BETWEEN 0.75% AND 1.5%
BFW 09/04 06:48 *IMMOFINANZ SELLS EU375M BONDS EXCHANGEABLE INTO BUWOG SHRS
BN 09/04 06:48 *IMMOFINANZ BONDS TO BE OFFERED IN AN ACCELERATED BOOKBUILDING
BN 09/04 06:47 *IMMOFINANZ OFFERS BONDS EXCHANGEABLE INTO BUWOG SHRS
BN 09/04 06:46 *IMMOFINANZ EU375M OFFER OF BONDS EXCHANGEABLE INTO BUWOG SHRS
BN 09/04 06:46 *IMMOFINANZ LAUNCHES EU375M OFFERING OF BONDS
BN 09/04 06:46 *IMMOFINANZ EU375M OFFERING OF BONDS EXCHANGEABLE TO BUWOG SHRS
BN 09/04 06:46 *IMMOFINANZ LAUNCHES EU375M OFFERING OF BONDS EXCHANGEABLE INTO
BN 09/04 06:46 *IMMOFINANZ STARTS A EU375M OFFERING OF BONDS EXCHANGEABLE INTO
BN 09/04 06:46 * IMMOFINANZ LAUNCHES A EU375M OFFERING OF BONDS EXCHANGEABLE

DGAP-Adhoc: IMMOFINANZ AG launches a EUR 375 million offering of bonds exchangeable into BUWOG AG shares
2014-09-04 06:46:30.605 GMT


DGAP-Adhoc: IMMOFINANZ AG launches a EUR 375 million offering of bonds
exchangeable into BUWOG AG shares

IMMOFINANZ AG / Key word(s): Real Estate/Bond

04.09.2014 08:46

Dissemination of an Ad hoc announcement, transmitted by DGAP - a service of
EQS Group AG.
The issuer is solely responsible for the content of this announcement.

(Challenges) L'histoire secrète de la paix signée entre LVMH et Hermès

L'histoire secrète de la paix signée entre LVMH et Hermès

Bernard Arnault et Axel Dumas ont enterré la hache de guerre mardi soir à l'issue d'un conflit saignant et riches en soubresauts. Mais l'accord semble satisfaire les deux parties.

Il est plus de 22 heures quand Axel Dumas, président d’Hermès et Bernard Arnault, PDG de LVMH se retrouvent mardi 2 septembre dans le bureau de Frank Gentin, président du Tribunal de commerce de Paris, pour signer l’accord qui doit enterrer près de quatre années de bagarre. Frank Gentin est un habitué des cas difficiles. Il a œuvré cet été sur le dossier Vivarte et a géré aussi le conflit qui a opposé le groupe Casino et Galeries Lafayette au sujet de Monoprix. C’est la première fois que les deux hommes se rencontrent : Axel Dumas avait jusqu’à présent toujours refusé de rencontrer le patron de LVMH. L’entretien sera de courte durée, les conseils respectifs ayant tout balisé pendant le week-end.

Quelques heures avant la signature, ce sont les conseils d’administration de Dior et de LVMH qui avaient donné leur feu vert à cette opération hors norme. le groupe de Bernard Arnault qui possède plus de 23% du capital de son rival va distribuer l’intégralité de ses actions Hermès à ses actionnaires et s’engage à ne pas acheter de titres pendant cinq ans.

L’opération a été structurée de telle sorte à ne pas déstabiliser le cours de l’action Hermès à ses actionnaires et s’engage à ne pas acheter de nouveaux titres pendant cinq ans. La normalisation des relations entre les deux groupes va se traduire par une distribution aux actionnaires de LVMH de titres d’une valeur de 6,4 milliards d’euros. Groupe Arnault, la holding patrimoniale de Bernard Arnault se retrouvera in fine avec 8,5% du capital d’Hermès. Cette opération va permettre à Hermès de retrouver un flottant plus normal pour une société de cette taille: il va passer de 7% à 22%.

Les ambitions déçues du géant du luxe

Pour Bernard Arnault, c'est l'épilogue d'un feuilleton qui aura fait couler beaucoup d'encre. Même si le groupe LVMH assure à maintes reprises qu’il ne voulait pas prendre le contrôle d’Hermès, ce message de bienveillance n'a jamais été pris au sérieux audible. En 2010, la famille Hermès est encore sous le choc de ce qu’elle vit comme une "intrusion".

LVMH annonce d’abord détenir 17% pour révéler quelques semaines plus tard en détenir plus de 20%, puis 23%. Tout le monde est convaincu que Bernard Arnault prendra tôt ou tard le contrôle de la maison et qu’il ne s’agit pas seulement d’une opération de placement financier.

En faisant une entrée massive au capital d’Hermès, Bernard Arnault espère alors recomposer l’actionnariat familial comme il a procédé chez Carrefour. Mais les trois branches familiales qui composent l’actionnariat d’Hermès et qui n’étaient pas toujours sur la même longueur d’onde voit dans cet ennemi commun le nouveau moteur de leur unité. En quelques semaines, elles bâtissent une forteresse, une holding de contrôle H 51 qui verrouille la quasi-totalité des participations maisons.

Hermès travaille sa communication. Elle se pose d’abord en victime, un mode classique. Puis change de braquet et attaque son adversaire sur le plan stratégique en opposant systématiquement Hermès à Vuitton, la culture de l’artisanat haut de gamme à celle de la production de masse, de la durabilité à l’éphémère. En somme, la marque légitime et l’autre. C’est plus subtil. Dans l’opinion, le message commence à passer. LVMH envoie des contre-feux, organise des événements comme Les Journées Particulières mais le mal est fait.

Un dossier à haut risques juridiques


Puis vient la séquence des procédures judiciaires. Et celle notamment de l’Autorité des marchés financiers qui détaille en public, le dossier complexe de la prise de participation de LVMH dans Hermès. "Nous prenons conscience que les procédures judiciaires en cours ne sont pas bien comprises par les médias, indique un proche de Bernard Arnault, certains médias n’hésitent pas à écrire que nous sommes condamnés pour délit d’initié alors qu’il s’agit de défaut d’information".

LVMH sera condamnée à 8 millions d’euros d’amende mais renoncera à faire appel. Dans l’entourage de Bernard Arnault certains plaident déjà pour une sortie. Des rumeurs font état d’une vente de la participation de LVMH à un fonds qatari. L’intention est suffisamment prise au sérieux pour que début juillet 2012, Patrick Thomas se rendent chez le ministre de l’Economie, Pierre Moscovici pour l’alerter de la menace qui pèse sur le capital d’Hermès.

La moindre phrase du camp adverse est décortiquée et peut donner lieu à des plaintes en diffamation. Nous sommes en juillet 2012 et l’heure n’est pas encore au réchauffement. Chez Hermès le système H 51 est pleinement opérationnel. Mais il montre aussi ses limites. La monétisation des titres Hermès n’est pas si simple : les volumes sont limités par opération. Et puis le traitement n’est pas aussi rapide qu’une cession classique sur le marché. Certains actionnaires familiaux, qui ne sont pas partis à l’étranger, doivent aussi constater que le titre, du fait de la prime spéculative liée à la participation de LVMH, est survalorisé et que leur impôt sur la fortune a bondi.

A l’occasion des résultats semestriels de la fin août 2013, Patrick Thomas qui les présente pour la dernière fois, ouvre une brèche : il demande à LVMH d’abaisser sa participation "en dessous de 15% se serait mieux", avance-t-il avec le franc parler qui le caractérisait. Le message est bien reçu en face. Mais pour l’heure, le dossier pénal est à l’instruction tandis que le tribunal de commerce est saisi d’une autre plainte. Des commissions rogatoires sont lancées en Suisse.

"Pas de perdants, pas de gagnants"


Chez LVMH, on mise sur le changement de gouvernance : en janvier Axel Dumas succède à Patrick Thomas. Mais les demandes de rendez vous sont systématiquement rejetés. Au début de l’été Hermès demande au Tribunal de commerce de surseoir l’examen de sa plainte et d’attendre les conclusions de la procédure pénale. Mais le tribunal de commerce refuse. Les premiers retours des commissions rogatoires sont bien maigres.

Chez Hermès on réalise que le contentieux risque d’être très long. Avenue Montaigne, le scenario d’une cession commence à être échafaudé fin juillet, en pleine réunion budgétaire. Bernard Arnault n’a pas l’habitude de faire un pas en arrière mais à partir du moment où il maitrise le timing et que l’opération est financièrement avantageuse pour les actionnaires, il ne faut plus hésiter.

Hermès est soulagé par le coup de fil de Frank Gentin qui propose une médiation mais veut prendre le temps de bien étudier la proposition. Il mobilise le cabinet de son fidèle avocat Philippe Ginestié qui travaillera tout le week-end sur le schéma. Le temps ensuite que les conseils d’administration valide le sujet et que les différents communicants de chaque partie s’entendent sur une communication a minima sur le sujet: "pas de cocorico, pas de perdant, ni de gagnant". La réconciliation entre Bernard Arnault et François Pinault s’étaient faite autour d’une bonne table. "On va attendre que l’encre des accords sèche un peu", confie un proche.

>>> BOJ Gov Kuroda: Virtuous cycle is working as domestic economy is recovering

BOJ Gov Kuroda: Virtuous cycle is working as domestic economy is recovering moderately 

- BOJ easing is having the intended effect
- Domestic economy continuing to exceed potential as a trend
- Private consumption is in a firm trend; household confidence is improving
- Employment and income situation recovering steadily
- Can still see effects of reaction to the April sales tax hike but expected to wane gradually
- CPI likely to reach 2% target in middle of projection period
- Exports are weakening; recovery in durable goods spending slow
- Hopes Japanese new Cabinet will take appropriate measures on economy
- Fundamentally the USD seen firming against the JPY and EUR currencies as US economy steadily recovers

(BFW) Reckitt’s RBP Valuation Raised to GBP2.6b in Demerger: Goldman


Reckitt’s RBP Valuation Raised to GBP2.6b in Demerger: Goldman
2014-09-04 06:31:54.873 GMT


By Chiara Remondini
Sept. 4 (Bloomberg) -- Goldman Sachs revises valuation of
Reckitt Benckiser’s RBP business to GBP2.6b, or ~355p per/shr,
according to note.
* Goldman sees de-merger more likely than sale of RBP; says it
previously valued RBP at GBP1.1b in possible sale
* Confirms buy, PT 6,215p vs 6,125p on added value attributed
to RBP from demerger, partly offset by reduced earnings
ests.
* Revising ests. for RBP in light of updated pipeline incl.
product development in adjacent categories, evolution of
suboxone franchise
* Cuts 2014, 2015, 2016 EPS ests. by 6%, 2%, 3% respectively
as use of cash is deferred
* Defers assumptions on cash use given lack of activity
YTD; still sees significant deployment with GBP13b spend
in 2015-2020
* NOTE July 28: Reckitt to pursue Pharma unit demerger,
separate U.K. listing


For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Chiara Remondini in Milan at +39-02-8064-4241 or
cremondini@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Jurjen van de Pol

>>> Brokers Upgrades & Downgrades - 04/09/2014 (Light today)



From: LAURENT CHEKROUN () At: Sep 4 2014 08:01:48
Subject: >>> Brokers Upgrades & Downgrades - 04/09/2014 (Light today)
>>> Up
*ABERTIS RAISED TO BUY VS HOLD AT DEUTSCHE BANK
*ADMIRAL RAISED TO OVERWEIGHT VS NEUTRAL AT HSBC
*CAT OIL RAISED TO BUY VS NEUTRAL AT UBS
*CONSORT MEDICAL RAISED TO BUY VS ADD AT NUMIS
*ILIAD RAISED TO OUTPERFORM AT RAYMOND JAMES
*MONCLER RAISED TO OVERWEIGHT VS NEUTRAL AT HSBC

>>> Down
*HENKEL CUT TO ADD VS BUY AT COMMERZBANK
*HUGO BOSS CUT TO NEUTRAL VS OVERWEIGHT AT HSBC
*TOD'S CUT TO NEUTRAL VS OVERWEIGHT AT HSBC

>>> PT changes


>>> Initiation
*LPKF RATED NEW NEUTRAL AT HSBC, PT EU15.5

>>> Call

>>> Centrica - Issues update on Heysham 1 and Hartlepool nuclear power stations,

Issues update on Heysham 1 and Hartlepool nuclear power stations, expects FY14 EPS to be reduced by 0.6-0.9p/share (previously saw negative impact of 0.3p/share) 
- Centrica notes the statement issued this morning by EDF Energy, providing an update on boiler inspections at the Heysham 1 and Hartlepool nuclear power stations. Centrica has a 20% interest in EDF Energy's existing nuclear operations.
- On 11 August 2014, Centrica announced that its 2014 earnings per share were expected to reduce by 0.3 pence per share, reflecting EDF Energys initial estimate of the reduced output from the affected nuclear power stations. On the basis of the latest estimates for returning the reactors to service, and the associated costs, Centricas earnings per share in 2014 are now expected to reduce by between 0.6 and 0.9 pence per share (inclusive of the 0.3 pence per share announced on 11 August 2014).

>>> Mail.Ru may fully control VKontakte soon, in final talks to buy 48% from UCP

Mail.Ru may fully control VKontakte soon, in final talks to buy 48% from UCP 

VKontakte, the largest Russian social network, in the near future may fall under full control, direct or indirect, of the internet group Mail.ru Group, reported Russian daily Vedomosti.

The negotiations on acquiring a 48% stake in VKontakte from of Ilya Sherbovich's investment group UCP are in the final stages, the paper reported citing two sources close to the close to the participants of the upcoming transaction and an unspecified banker.

The deal may take place within several weeks, one of the sources told Vedomosti. The buyer of UCP’s stake could either be Mail.ru Group or a third party linked with the group’s shareholders.

Mail.ru Group, controlled by Alisher Usmanov’s USM Holdnig, currently owns a 52% stake in VKontakte.

The whole of VKontakte is most likely to be valued about USD 2.9bn, according to the sources. Based on this, the price of the 48% stake could reach almost USD 1.4bn.

In 2013, VKontakte posted revenues of RUB 5.7bn (USD 154.6m) and Mail.ru Group of RUB 27.4bn, the item added.


Source Vedomosti

>>> Orange targets Yoigo and Jazztel and plans to speed up network expansion

Orange targets Yoigo and Jazztel and plans to speed up network expansion 

Federico Colom, finance director for Orange's Spanish unit, revealed on Wednesday plans to take any acquisition opportunities in that country, reported Expansion. Speaking at a sector event, Colom said that should the Spanish broad band cable operator Jazztel or the mobile operator Yoigo be put up for sale, Orange would be a keen suitor, according to the report.

Orange plans to to expand its own fiber network in Spain and increase investments to reach 4m homes by 2017, reported Expansion. The new project doubles Orange's initial plan to build a network on its own to reach 2m homes. With this new strategy, Orange could end up with a network that may reach up to 7m homes by 2017.

TeliaSonera, the Swedish operator, has put up for sale its 76% in Spanish mobile unit Yoigo, also targeted by Vodafone and Jazztel, according to the report. A previous sale process was cancelled in April 2013 because TeliaSonera deemed the offers tabled by Vodafone and Orange insufficient. Yoigo was then valued at around EUR 1bn.

Orange rival Telefonica expects to reach more than 10m homes this year and up to 18m by 2016, and Vodafone's acquisition of Ono has given the UK operator access to high-speed networks in 7.5m homes, the item noted.


Source Expansion