The Arnault family unexpectedly announced a complex operation that will simplify the corporate structure of Christian Dior and Lvmh, a company both listed on the Paris Stock Exchange and tied to each other in two ways. Indeed, Lvmh luxury giant (holds about 70 luxury brands and closed 2016 with record sales of 37.6 billion in sales), is controlled for about 46% by Christian Dior Holding, which is in turn For 74% of the shares to the Arnault family.
The Dior operating company will pass under the Lvmh hat
This morning it was announced that the Christian Dior Couture operating company will be moved by the Dior holding company to Lvmh, which will pay 6.5 billion euros.
At the same time, the Arnault family will launch a public purchase offer on the financier by putting 172 euros per share on each Dior share, plus 0,192 Hermes International shares.
Fly by over 10% Dior, Hermes falling
On Stock Market, Lvmh's shares are moderately up, while more than 10% in Christian Dior's turnover.
I'm backing Hermes's titles used by the Arnault family to pay Dior's shareholders.
Arnault releases Hermes shares in the portfolio since 2014
The offer for Dior's shares in practice is structured by two-thirds in cash and the rest in Hermes's securities, with a 14.7% premium on yesterday's prices and 18.6% last month.
However, Arnault also gives you the option of opting for a full cash payment, offering 260 euros per share, or fully in Hermes shares, with an exchange of 0.566 Hermes each Dior, within a total payment of 8 billion in cash and 8, 9 million Hermes shares. With the operation announced today, the Arnault family definitively frees up Hermes's actions in their own safe and were the result of a failed attempt to climb the French luxury pearl.
Stepping back, in fact, in 2015 Bernard Arnault had attempted the assault on competition by pushing to grab 23.1% of the maison's capital.
The Dumas family, however, had quadruped to defend the inherited jewel and after a long battle of flagged papers and passages in the Tribunal, in 2014 an agreement had been reached according to which Hermes shares had been distributed to Lvmh members and Also to those of Dior, being the latter majority shareholder of Lvmh and having received numerous titles.
At the end Arnault had left 8.5% of Hermes's capital, which they were disfellowshipped with the operation that will be in port in the coming months, obviously after the green lights of the competent authorities.
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Dior will be a growth engine for Lvmh
Lvmh's patron Bernard Arnault explained that the project is important to his group: "The two operations simplify the long-standing corporate structure of the market and strengthen Lvmh's fashion and leather footwear, thanks to 'Acquisition of the Dior brand, one of the most iconic in the world.
The operations, moreover, added the entrepreneur of Oltralpe, testify to the commitment of the Arnault family, which demonstrates their confidence in the future of Lvmh and its brands. "
Christian Dior Couture was valued at 6.5 billion euros, or 15.6, the Ebitda of the maison, which was founded by Christian Dior in '46 and today 'is one of the most prestigious luxury brands in the world,' he stressed The note of Lvmh. Dior is present in leather goods and footwear, haute couture, prêt-à-porter for women and men, in jewelery. The products are marketed almost exclusively in 198 boutique properties.
Over the past five years, sales have almost doubled, reaching 2 billion euros, with a 412 million euro ebitda and an operating profit of 270 million.
Christian Dior Couture at this point "will be a growth engine for the Lvmh group", is still written in the press release.
Analysts point to Dior Couture rating
CM-CIC analysts appreciated the operation announced today by the Arnault family. "A simplification of the structure that had been waiting for 25 years," they commented.
The experts however pointed to the price index paid by Lvmh for Christian Dior Couture, which they consider to be "very high" well above their estimates around 4 billion euros.
(The Sole 24 ore Radiocor Plus)