French billionaire Bernard Arnault has taken a personal equity stake in Cartier’s parent company Richemont, according to people familiar with the investments.
It is not clear exactly how many shares the LVMH chairman and CEO acquired in Cie Financiere Richemont SA. One of the people described it as “small” and part of the Arnault family’s broader portfolio of investments in publicly traded companies.
Arnault currently intends to hold the stock only as an investment, the person said, asking not to be named to discuss confidential matters.
News of Arnault’s stake in Richemont, which is controlled by South African billionaire Johann Rupert, was revealed as part of a wider profile of the businessman published in Bloomberg Working week.
Shares in Richemont rose as much as 3.1 percent in Zurich, although they have fallen 2.4 percent over the past 12 months. LVMH is trading 0.7 percent higher in Paris.
A representative for Arnault and LVMH Moët Hennessy Louis Vuitton SE declined to comment.
LVMH, the world’s leading purveyor of high-end goods, is the third most valuable company in Europe with a market capitalization of approximately €366 billion ($391 billion). Richemont’s market value is 84.7 billion Swiss francs ($91.3 billion).
Arnault’s stake in Richemont may still raise questions about his investment intentions. Richemont has a strong defense against unwanted suitors because its chairman, Rupert, controls 51 percent of the voting rights, despite owning only 10.2 percent of the capital. Over the past few years, Rupert, who is 74, has emphasized his desire to keep the group independent.
As of March 31, there were no other significant shareholders in Richemont holding at least 3 percent of the voting rights, the Swiss company said in its latest annual report.
Arnault, 75, described Richemont’s Cartier and Van Cleef & Arpels as “two great brands” at LVMH’s annual results presentation in January. He also praised Rupert’s leadership of the company.
“Let me end with Richemont and Mr. Rupert, who I consider an exceptional leader,” Arnault said at the time. “I don’t want to disturb his strategy, I understand that he wishes to remain independent and I think that is very good. And if she needs support to maintain her independence, I’ll be there.”
Fourteen years ago, LVMH invested in the French luxury house Hermes International SCA. Arnault’s company used stock derivatives to secretly build up a stake that eventually reached 23 percent, shocking the family behind Hermes. At the time, Arnault called the move “friendly”. Target fought back and fended off LVMH, which divested itself of its stake in the Birkin bag maker.
LVMH owns stores including Loewe, Celine and Fendi in fashion, as well as cosmetics retailer Sephora and brands Dom Perignon and Moët & Chandon Champagne. Its last major acquisition was the $16 billion purchase of Tiffany & Co more than three years ago, the largest deal in the luxury industry to date.
LVMH also owns jewelery brands Bulgari, Fred, Chaumet and Repossi, so if Arnault ever had proposals to take over Richemont, the union could potentially attract antitrust scrutiny. Fashion brands LVMH Louis Vuitton and Christian Dior Couture also have jewelry lines.
As of June 24, Arnault’s fortune was estimated at about $203 billion, ranking him third behind Jeff Bezos and Elon Musk, according to the Bloomberg Billionaires Index.
Author: Angelina Rascouet
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