LVMH SAYS DFS DEAL IS SEWN UP

PARIS — LVMH Moet Hennessy Louis Vuitton said Friday that it has a definitive contract giving it the “irrevocable” right to purchase 58.75 percent of DFS Group for $2.467 billion and that the reported interest in DFS by Kolberg Kravis & Roberts will not fly.
In a letter issued in response to reports that KKR was interested in taking over the DFS Group of duty-free shops, LVMH said that it has the agreement with the majority shareholders of the DFS Group and that all parties to the agreement plan to comply.
LVMH also pointed out that the letter of interest sent by KKR has no price and does not constitute an offer. KKR also states that its interest is subject to a waiver by LVMH of the agreement. “LVMH obviously has no intention of granting such a waiver,” the LVMH letter states.
Further LVMH said that the selling shareholders in the LVMH agreement have stated that “they have no interest whatsoever in KKR’s proposal.”
In addition, LVMH said that it is the only purchaser that can increase the volume and profits of the DFS Group by enabling it to sell products such as Louis Vuitton, which it did not have previously. LVMH also stated that it will make every effort to keep the management in place and safeguard their independence in running the business.
Two minority shareholders, who hold the other 41.25 percent of the stock, have filed suit to prevent the majority shareholders from selling the majority interest without the consent of the minority holders.
KKR executives had no comment on LVMH’s statement.

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