The transaction will be financed by a vendor loan granted to LVMH with a maximum maturity of 24 months, allowing LVMH to refinance at the appropriate time, based on market conditions. This will be done as a part of a project aiming at simplifying Christian Dior – LVMH group structures by regrouping the entire Dior brand within LVMH.
The two-fold strategic project, announced by the Arnault Family Group, Christian Dior and LVMH Moët Hennessy – Louis Vuitton, includes simplification of the structures through a simplified public offer by the Arnault Family Group for Christian Dior shares it does not currently hold. This public offer would primarily take the form of a mixed offer consisting of €172 in cash and 0.192 Hermès International shares for each Christian Dior share, and would be completed by two secondary offers, in cash and in Hermès shares respectively. It also includes the strengthening of Fashion & Leather Goods division of LVMH through the acquisition of Christian Dior Couture from Christian Dior for an enterprise value of €6.5 billion.
The main features of the project are the public offer values each Christian Dior share at €2602, which represents a premium of 14.7 per cent over the closing share price as of April 24, 2017 and 18.6 per cent over the 1-month average share price.
The Boards of Directors of Christian Dior and LVMH are unanimously favourable to the contemplated transactions and have appointed independent experts to review their terms, LVMH said in a press release.
“This project represents an important milestone for the Group. The corresponding transactions will allow the simplification of the structures, long requested by the market, and the strengthening of LVMH’s Fashion & Leather Goods division thanks to the acquisition of Christian Dior Couture, one of the most iconic brands worldwide. They illustrate the commitment of my family group and emphasise its confidence in the long-term perspectives of LVMH and its brands. I am delighted to announce this project today and thus continue and reinforce the development of LVMH in France and worldwide,” said Bernard Arnault.
The closing of the transaction is expected for the second half of 2017 subject to compliance of the offer for Christian Dior shares. (RKS)
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