PARIS--Minority shareholders in Financiere Agache have won a significant battle against Bernard Arnault, a setback that will cost the luxury goods czar more than $12 million.
Following several weeks of pressure by these shareholders, the Arnault group has agreed to change the terms of a tender offer, which is designed to simplify the structure of his group and tighten Arnault's hold on LVMH Moet Hennessy Louis Vuitton, the huge prestige products conglomerate.
Under the initial offer, one share in Agache, his main investment vehicle, could have been exchanged for one share in Christian Dior and one share in LVMH. But after a group of minority shareholders in the Association de Defense des Actionnaires Minoritaires (ADAM) bitterly criticized the offer, Arnault has sweetened the deal.
Instead, shareholders will be able to exchange eight Agache shares for nine each in Dior and LVMH, a 12.5 percent improvement, costing the Arnault group about 65 million francs more.
"Changes are not infrequently made in tender offers in France. This is nothing exceptional," said a spokeswoman for LVMH.
However, ADAM president Colette Neuville was far from happy with the improved offer.
"It's a step in the right direction, but still not enough. We believe that Agache stock is worth even more," she insisted. Neuville noted that Arnault's old ally, Paris investment bank Banque Lazard, which owns 11 percent of Agache, has announced it will not participate in the tender.
"The people at Lazard are not fools. If they want to hold on to the stock, that means they think that one day they can sell out for more. We want another clause guaranteeing us that same right," Neuville said.
She said ADAM may still sue the Arnault group to block the offer: "We still haven't made up our minds, but it's a real possibility."

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