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Regulator to weigh Hermes buyout waiver Thursday: source
PARIS (Reuters) - France's stock market regulator will examine Hermes request for a waiver on buying out minority shareholders on Thursday as the luxury goods maker tries to fend off a takeover from rival LVMH, according to a person familiar with the matter.
The sixteen-member committee of the AMF will debate the issue, but may not make a decision immediately. If it requests more information, the verdict might not come for another 15 days, the person said.
"The issue will go before the committee on Thursday," said the person familiar with the matter.
The AMF declined to comment on Tuesday.
Hermes decided earlier this month to create a holding that would allow family shareholders to control more than 50 percent of equity to defend itself against hostile takeover.
Legally, shareholders, once united through a pact or a holding, need to launch a buyout of other shareholders when their holding climbs above 33 percent.
However, under certain circumstances, they may obtain a waiver from the AMF.
LVMH now owns 20.21 percent of Hermes, after having discreetly built up a 17.1 percent stake starting in 2008, mainly via derivatives.
The founding family of Hermes was said to have been surprised and displeased about the arrival of LVMH and tried unsuccessfully to convince Bernard Arnault, LVMH's controlling shareholder and chief executive, to withdraw from its capital.
Hermes family shareholders, which number around 60, together own about 73 percent of the company.
The French association of minority shareholders has already said it opposed Hermes getting a buyout waiver from the AMF.
LVMH's move on Hermes via derivatives known as equity swaps, together with Hermes's defense measures, have exposed loopholes and weakness in French stock market regulation.
Equity swaps had enabled LVMH to avoid having to declare its stake-building in Hermes.
(Reporting by Pascale Denis, writing by Leila Abboud; Editing by Hans Peters)
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