Moët-Hennessy

"It is better to deal with God than with his saints. The Moët-Hennessy clan reacts like Chevalier: since Racamier opened the door to Arnault, they might as well deal directly with him! A royal path thus opens up before the boss of Financière Agache. Especially since David Dautresme recovers 12% of the capital of LVMH, just by making a few phone calls. These securities are, in fact, in the hands of the six investors to whom the OBSA issued by Moët-Hennessy in 1987 had been placed. Since then, these securities have discreetly remained parked in these six parking lots: UAP, Caisse des dépôts, Crédit agricole, Worms Bank, BNP and... Lazard, lead manager of the operation. Dautresme is thus negotiating with these establishments the conditions for the sale of these OBSA to Bernard Arnault. But the sellers must not appear, as it was stipulated that these securities had to be placed in the general public. Also, once the terms of the transaction are agreed upon, they will be invited to go through a discreet Belgian-Luxembourg intermediary, Belmavobel International Securities."

"To protect the capital of Moët-Hennessy, Bruno Roger proposes to Alain Chevalier to issue 800 million francs (122 million euros) of bonds with warrants (OBSA). These are fixed-income securities that can later be converted into shares."

"In the vineyards of Champagne and Charentes, there is relief. For several months, people there had been living in fear of a takeover bid for Moët-Hennessy. A choice target with its collection of great brands, including the top champagne, Moët-et-Chandon (30 million bottles), one of the two great cognacs, Hennessy (46 million bottles), a prestigious perfume, Dior, and renowned beauty products, such as Roc. But what neither the families nor Chevalier nor Racamier realized is that size is no longer, in itself, a defense against a takeover bid."

"On both sides, grievances accumulate. Racamier's explanation: "The people at Moët-Hennessy experienced the merger as an absorption of Louis Vuitton and not as what it really was, namely an association." Chevalier's version: "Racamier is a difficult man who wants to control everything down to the smallest detail; you can't run a business with him." The disillusionment is great for Chevalier, who thought he could put the Vuitton family in his pocket as he had previously done with Moët, Chandon, Hennessy, and others Mercier."

"To achieve his goals, however, he made a major concession to Henry Racamier: LVMH would be led by an executive board and a supervisory board, a more collegiate organization that, for Racamier, would bring more autonomy to the various components of the group. Chevalier cannot oppose this new organization, desired by his shareholders, but he does not appreciate it. He senses that these two capitalists will constrain him, the salaried manager, to execute their choices. For the first time since he became president of Moët-Hennessy in 1982, he discovers that he has shareholders."

"He has listened to Racamier. He has "ears" everywhere. He is now informed, in real time, of what is going on. His informants have noticed a lot of comings and goings at the Moët-Hennessy headquarters on Avenue Hoche."

"On April 29, 1994, the Christian Dior and LVMH shares were sold by Guinness to Financière Agache for 11.7 billion francs, while their stock market value that day was 16.911 billion, representing a loss of more than 5 billion for Guinness! In reality, this loss is only apparent. Guinness received 3.7 billion in cash but also 34% of Moët-Hennessy, until then a 100% subsidiary of LVMH, with an estimated value of 8 billion francs. However, this stake was also "obtained at a significantly undervalued price," asserts the Gaudino report, which, in the absence of accounting documents, establishes an evaluation of Moët-Hennessy by comparing the operating results with those of LVMH and its stock market value. From these calculations, it appears that Guinness benefited from an undervaluation of the price of Moët-Hennessy shares for a total amount of 7 billion francs. "This loss was clearly incurred to the detriment of the minority shareholders of LVMH, who held the sold Moët-Hennessy shares." In other words, by selling its LVMH and Christian Dior shares to Financière Agache below their price on the one hand and, on the other hand, by acquiring LVMH shares of Moët-Hennessy, also undervalued, Guinness would have made a neutral operation, but would have massively enriched Bernard Arnault (shareholder of Financière Agache). This contested operation led to the almost doubling of Christian Dior's interest percentage in LVMH, which rose from 24% to 40.75%."

"Marcel Boussac is forced to gradually sell almost all of the capital of Parfums Christian Dior to the Moët-Hennessy group."

"The threat of a raid is becoming increasingly clear. Alain Chevalier and Jean-Louis Masurel call on Bruno Roger for help. Together, they reflect on different means of deterrence and decide on an issuance of bonds with subscription warrants for shares (OBSA) on the eurofranc market. Shareholders waive their preferential subscription rights in favor of potential foreign investors whose names they don't even seek to know. The issuance is launched in mid-March 1987 under the direction of David Dautresme, managing partner of Lazard. The bank on Boulevard Haussmann takes the lead of the banking pool which includes Crédit Lyonnais, BNP, and Crédit Suisse-First Boston. Each bond, worth 10,000 francs, is accompanied by 18 warrants allowing subscription to Moët-Hennessy shares at 2,720 francs until April 1990. The bonds and warrants are listed separately. In total, the operation ultimately yields nearly 4 billion francs and potentially represents 18% of the group's capital."

"On the eve of autumn, Anthony Tennant is embarrassed. Certainly, the agreements of July 8 have allowed him to strengthen his positions in LVMH and especially in Moët-Hennessy, to which he is linked by a vital distribution agreement. But is the alliance with Bernard Arnault really reliable? Two nights (July 6 and 7) were too short to give birth to "Jacques Rober". The terms of the contract seem increasingly ambiguous as the days go by. Wasn't the Briton naive? And he remembers a banker's joke: "Jacques Rober is JR, the villainous hero of the Dallas series." For Bernard Arnault, the agreements are clear: the two parties are associated for at least three years within Jacques Rober, with 60% for Bernard Arnault and 40% for Guinness, with the aim of acquiring 30% of LVMH, except for "unforeseen circumstances". Each party agrees not to buy outside the joint structure without prior consultation. In other words, it is possible to pick up shares provided that one's partner has been informed, but without waiting for their response. The Briton is worried. Aren't there two possible interpretations? Can't Arnault buy more easily than Guinness? What is an "unforeseen circumstance"? What will happen beyond the 30% threshold? And above all, if Guinness wants to sell its stakes before the three-year deadline, it will only be compensated for 80% of the value of its shares. The terms of the "largely interpretive" agreement reduce Anthony Tennant's room for maneuver."

"Such a change cannot be coincidental. Henry Racamier's rehabilitation is carefully orchestrated. He speaks little: an interview with AFP in February, another with Nouvel Observateur a month later; through carefully selected media; rather left-wing, he sends a clear message, always the same: he who built his company, Vuitton, is being kicked out by an unscrupulous financier. It is time to give some autonomy back to the various subsidiaries of the group, a luxury company like his cannot be managed like a wines and spirits company, Moët-Hennessy, whose products are sold in supermarkets."

"In 1987, Moët-Hennessy had launched bonds with warrants for subscription to shares (Obsa). The warrants attached to these bonds allowed for subscription to Moët shares within a period of three years, at a predetermined price of 2,720 francs. A high price for the time. The operation amounted to a capital increase carried out over three years, totaling 4 billion francs. This represented nearly 18% of Moët's capital. Only bondholders could benefit from this capital increase. In the context of the time, where Moët-Hennessy was seriously threatened by a stock raid, the issuance was intended, according to the COB, to protect a significant portion of the capital."