Legal and Procedural Mastery to Avoid Takeover Costs

"Certainly, on January 5 and 6, he launched a real raid on LVMH. In forty-eight hours, he picked up 870,000 shares, or 7.5% of the capital, propelling the share price to 4,720 francs. He thus secured the minority blocking vote, thanked former president Alain Chevalier, and sat in his CEO chair. But he navigated so well through the intricacies of the law that no one has so far concluded that there has been a change of control (in legal terms). This hypothesis would have obliged him to launch a takeover bid or to carry out a price maintenance, at a cost of around 30 billion francs."

"As for the change of control of LVMH, Arnault feels completely safe. He no longer runs the risk of being forced to launch a takeover bid. Since Férinel, he has taken the greatest precautions every time he undertakes an operation. This "procedural" talent almost always spares him."

"The COB has already pronounced on this point, declaring as early as January 10: "The triggering of the price maintenance procedure must occur when there is a change of control by means of a takeover bid or block sale, which is not the case at LVMH." It clarified: "No text prohibits stockpiling, even if stock market authorities are reflecting on this issue. 36""

"Mrs. Piniot recalls that Moët's management had committed to placing the warrants with foreign investors. However, she notes that more than two-thirds of the issued warrants were placed with French institutional investors who agreed to hold them for a certain period of time. These included the Caisse des dépôts et consignations, the Caisse nationale du Crédit Agricole, Crédit Lyonnais, BNP, and UAP. A memorandum of understanding was even considered to formalize this commitment. It was only signed by UAP. Therefore, Mrs. Piniot concludes that there was a "misuse of procedure harmful to minority shareholders." Even more serious, she emphasizes that Bernard Arnault was perfectly aware of this irregularity when he entered the capital of LVMH. When the head of Dior abandoned his takeover bid and opted for a less aggressive solution, Lazard bank assigned one of its partners, David Dautresme, to recover the maximum number of warrants and "negotiate the conditions of their transfer." The operations were carried out through a Luxembourg intermediary, Belmavobel International Securities. Thanks to these negotiations, Arnault obtained nearly 94% of the issued warrants, which ensured him nearly 12% of LVMH's capital."