PARIS (Reuters) - LVMH (LVMH.PA) said on Wednesday it planned to buy more Hermes shares and disclosed to French regulators that it built up its 17.1 percent stake in Hermes partly through derivatives, called equity swaps.
LVMH, the world’s biggest luxury group, took the market by surprise on Saturday by announcing it had acquired 14.2 percent of Hermes International (HRMS.PA) and could increase its holdings to 17.1 percent through derivatives, which it did shortly thereafter.
LVMH said over the weekend it had acquired its Hermes holdings at an average price of 80.5 euros a share, or a 54 percent discount to Hermes’ closing share price prior to the announcement, raising questions as to how it had secured such a price.
LVMH said on Wednesday its units had settled several equity-swap contracts signed during 2008 and instead of settling them in cash, they were settled Hermes shares.
A spokesman for the French market regulator AMF said it would examine LVMH’s stake threshold crossings. LVMH said it had respected AMF rules and would comply with all deadlines for filings.
The luxury group reiterated it did not plan to make a bid for Hermes or seek control of the company, but planned to buy more Hermes shares depending on market conditions.
“The investment of LVMH in Hermes International is strategic and for the long term,” LVMH said in its filing to the AMF. “LVMH supports the strategic vision the development and positioning of Hermes International.”
Editing by Maureen Bavdek