The proposed squeeze-out plans in France are creating a buzz within the luxury sector, particularly catching the attention of Bernard Arnault, the powerhouse behind Christian Dior. With President Macron’s “loi Pacte” bill on the horizon, the landscape for business in France is set to change, potentially making it more enticing for companies like Arnault’s to take action. One key element of this bill is the reduction of the threshold needed to buy out listed minorities from 95 percent to 90 percent, opening up new possibilities for Arnault and his plans for Dior.
As the wealthiest individual in France, Arnault has already made significant moves towards acquiring Dior. Last year, he made a hefty bid of 12 billion euros in an effort to secure full control of the iconic brand. While this initial bid fell just short of the required threshold, recent data shows that Arnault has increased his stake to 96.5 percent. This puts him in a prime position to consider delisting Dior before the new rules take effect, giving him greater autonomy over the brand’s future.
Although there is no immediate pressure for Arnault to take Dior private, there are clear benefits to doing so. By reducing public ownership, financial disclosure requirements would lessen, resulting in streamlined operations and cost savings. Additionally, simplifying the structure of LVMH by consolidating Dior under full ownership could be advantageous for both the conglomerate and its shareholders.
Despite a recent increase in Dior’s valuation, a slowdown in luxury sector sales driven by weakening Chinese spending may offer an opening for Arnault to make a move. Dior shares have dipped around 12 percent since their peak this summer, offering a potential opportunity for Arnault to acquire remaining minority stakes at a more favorable price. With the brand’s current market value just above its three-month average, Arnault could secure these stakes for approximately 2 billion euros.
While this investment would be substantial, it is important for Arnault to consider the potential gains. Waiting too long to act could mean missing out on the chance to further solidify his control over Dior and capitalize on a rebound in the luxury market. The current environment presents a strategic moment for Arnault to reassess his position and potentially take Dior out of the public eye for good.
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