Hermès accuses luxury giant LVMH of stealthy takeover bid The derivative contracts were a surreptitious way for LVMH to avoid disclosure requirements - one favoured by hedge funds - and proved hugely profitable when Hermès rebounded. Insisting he had "no intention of launching a tender offer, taking control of Hermès, nor seeking board representation" Mr Arnault described his move as entirely "friendly." Furious, Hermès Chairman Bertrand Puech told the French daily Le Figaro, "With friends like these, who needs enemies?" CEO Patrick Thomas was even blunter, exclaiming: "If you want to seduce a beautiful woman, you don't start by raping her from behind." Wasting no time, the Hermès family ring-fenced 51pc of the 72pc of their stake in a holding company that cannot be sold to outsiders. Analysts say while relations have promised to sell to the family, Mr Arnaud is playing the long game, hoping there will be rifts in the years to come. Meanwhile, the French markets watchdog, AMF, launched an investigation into the share build-up. In October it said it did not believe LVMH had engaged in insider dealing or share price manipulation but referred the case to its sanctions committed - due to decide by the summer. In parallel, Hermès asked prosecutors last July to open a probe into alleged insider trading and share manipulation. It filed a new complaint in October asking a magistrate to launch a formal investigation, arguing that LVMH's failure to tell the market about buying its shares artificially kept their price down. Mr Thomas said the group had filed a complaint as the AMF had only "limited investigative powers" as it was unable to go abroad "notably to Panama, Luxembourg or Switzerland" -countries through which he said LVMH funds passed to enter Hermès" capital. The appointment of a magistrate marked a new "offensive phase" in its strategy, he said. LVMH in turn said it had filed a suit against Hermès for "slander, blackmail and unfair competition," accusing its rival of making disparaging and libellous remarks. Hermès described the move as a "decoy launched just when a magistrate has been named." For the company, LVMH represents everything it is not. There is a part of our world that is playing on abundance, on glitz and glamour. And there is another part that is concentrated on refinement, and basically making beautiful objects," Mr Thomas told the New York Times. We don't want to be a part of this financial world which is ruining companies and dealing with people like they are goods or raw materials. It's not a financial fight, because we would lose that. It's a cultural fight. The "culture of Hermès" sees it shun Chinese assembly lines to employ artisans in France to hand-sew its famous Kellys and Birkins, weave its flagship scarves in Lyon from silk raised on its farm in the mountains of Brazil and have an in-house "nez" who creates perfume from his home near Grasse, the world's perfume capital in the South of France. The approach has been spectacularly successful. This month, the group posted a record net profit for 2012 of €740 million, up 24.5pc and well above forecasts, confirming a stellar performance for France's luxury industry as a whole last year. Up 32pc, the company's operating margin was the highest since Hermes went public in 1993. Sales in Asia, excluding Japan, rose 36.2pc. LVMH has also saw profits rise 12 per cent in 2012 to €3.4bn (£2.9bn), with total revenue up 19pc to €28.1bn (£24.2bn). It still hopes to persuade Hermès family members it can bring its savoir-faire to the table. But Mr Thomas told Le Monde the pair's "business models are incompatible." "We will use all the legal means at our disposal to make LVMH leave Hermès" capital or reduce its participation," he said.