On October 27 2010, LVMH revealed that it had accumulated a
17.1% stake in Hermès International by using equity swap
contracts for 12.8 million Hermès shares. In its
regulatory filing, LVMH stated that it had no plans to bid for
all of Hermès' shares, that it was not seeking control
or board representation, but that it "considered pursuing,
where appropriate, its acquisitions of Hermès
International shares according to market conditions".
LVMH's surprise announcement after crossing various
statutory disclosure thresholds raised questions about whether
it violated French securities regulations or instead exploited
loopholes in these regulations to avoid disclosure. On November
5 2010, the French securities regulator, the AMF
(Autorité des Marchés Financiers),
announced that it had begun investigating the conditions under
which the Hermès shares were acquired.
Defining control It should first be noted that LVMH...