PARIS — Hermès International continues to strengthen its barricades against a potential creeping takeover by LVMH Moët Hennessy Louis Vuitton.

This story first appeared in the April 18, 2012 issue of WWD. Subscribe Today.

At its annual shareholders’ general meeting on May 29, the French luxury house will propose naming Nicolas Puech, the single largest family shareholder, as the 11th member of the supervisory board. It will also submit a change in statutes requiring holders of more than 0.5 percent of shares to register them to their name. The measures were detailed in the company’s 2011 annual report.

Nicolas Puech is the brother of Bertrand Puech, the executive chairman of Emile Hermès Sarl, which represents the family shareholders. Nicolas Puech made headlines last year by telling a French newspaper he thought it was not a good idea to lock up all the family’s shares in a holding group in order to protect the firm from a potential LVMH offensive — though Bertrand Puech later insisted the family unity was intact.

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After clearing legal challenges, Hermès in December completed the creation of a nonlisted holding company, dubbed H51, which groups 50.15 percent of its share capital.

Nicolas Puech, who owns 5.8 percent of the capital, reportedly does not plan to add his shares to the family holding, but his arrival on the supervisory board is a concrete symbol of his allegiance to the Hermès clan, made up of the Dumas, Puech and Guerrand families.

The proposed change in statutes, meanwhile, will require anyone owning a number of shares exceeding 0.5 percent of the capital, and for each additional 0.5 percent tranche, to register all the shares in their ownership under their name.

Had it been in place at the time, such a measure would have alerted Hermès to the presence of LVMH in its capital, which only came to light when the luxury behemoth revealed in October 2010 that it had purchased 17.1 percent of Hermès shares via cash-settled equity swaps, in a move that is still being investigated by stock market authority AMF. As of Dec. 31, LVMH had raised its stake to 22.3 percent, according to the Hermès annual report.

Continued speculation of an LVMH takeover has helped Hermès shares rise 8.2 percent since the beginning of the year, even though the free float represents only 7.7 percent of the total capital. On Monday, Hermès shares closed at 250.25 euros, or $327.25 at average exchange rates for the day.

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