Business

Hermes files complaint against LVMH over share purchase

Hermes is famed for its scarves and bags
Image caption Hermes is famed for its scarves and bags

Luxury fashion retailer Hermes has taken legal action against rival LVMH, citing the way it bought a stake in it two years ago.

Hermes - known for its silk scarves and leather bags - said it had filed the complaint in a Paris court on 10 July.

"This complaint relates to the terms in which LVMH became a stakeholder in Hermes International," Hermes said.

LVMH, which currently owns 22.3% of Hermes, has been gradually increasing its holding.

In 2010 LVMH, which is controlled by billionaire businessman Bernard Arnault, revealed that it had built a surprise stake of 17% in its smaller rival.

As a result, Hermes family shareholders created a majority family holding controlling more than half of the company's shares.

The move ensures any takeover attempt would now require the approval of the Hermes family - the majority stakeholder.

France's AMF market watchdog is currently conducting a probe into the terms of LVMH's stakebuilding.

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