HRMS

HRMS Majority family owned Hermes has sought to defend itself from the threat of a takeover by LVMH, the world's largest luxury group, which has built up a 20 percent stake. Speculation that Bernard Arnault, LVMH's controlling shareholder and France's wealthiest man, is intent on buying Hermes has sent its shares soaring in the last three months. Hermes forecast a 12-14 percent rise in consolidated revenue at constant exchange rates for 2011 on Tuesday, ditching its previous range of 8-10 percent after a better-than-expected performance in the second quarter. "Hermes is well positioned in a buoyant luxury goods market, delivering fast sales and earnings growth while maintaining its status as one of the most exclusive brands around


Cheuvreux analyst Pierre Lamelin said. "The share is expensive but remains a special situation due to its shareholder structure." LVMH bought a 20 percent stake in Hermes in a surprise approach late last year, making it the company's largest outside shareholder. Hermes fought back by setting up a family holding company aimed at presenting a united front against LVMH's advance. Its shares have gained nearly 50 percent since mid-April, despite LVMH saying it has no plans to make a bid, while the broad French market has fallen over the same period. The stock was little changed at 220.45 euros at 1131 GMT, near its 224.95 euro record high. Hermes shares trade at 42 times expected earnings for 2012, by far the highest price-to-earnings ratio in the pricey luxury sector.

HRMS