Shortly after LVMH had purchased a 17.1% stake in the prestigious French luxury brand Hermes, the French government could be changing their law, why? Today the French law states that investors must make a declaration when a purchase is made more than 5% of a company's stock; however this does not include cash-settled equity swaps which was the method used when LVMH made their purchase. In an effort to protect companies from hostile coups the French government may be changing it's laws. If the law change is not made there is potential for others to do the same and with little transparency it causes a dilemma for companies and its shareholders.
Transparency on such matters enables share holders to decide when to sell and when to buy and if no one knows who is increasing their shares, if cash-settled equity swaps are being used, then the principle shareholders could change without anyone's knowledge until the deed is done.
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