Hennes & Mauritz, the fast-fashion retailer who has been listed on the Swedish stock market since 1974, is constantly changing back to private property.
The founding family has raised the purchases of H&M shares and spent more than 63 billion crown ($ 6.6 billion) since 2016 to collect almost two thirds of control and fire speculation that could bring the company based in Stockholm back into private hands.
The Perssons, one of the richest families in Sweden, have built up a growing participation by the Holding Society Ramsbury Invest and say little about their intentions that they believe in H&M, which was founded in 1947 by Erling Persson. The media -shy clan now has a striking distance from the full control of the retailer, who has led to the ground in recent years among buyers on its main competitor Zara and “ultra -fast fashion”.
“This is something that we have been talking about for years, and only a few would doubt that the direction that leads the things,” said Sverre Linton, Chief Legal Officer and spokesman for the Swedish shareholders who represent small equity investors. If the family does not plan to take H&M privately, this should communicate more clearly and no longer buy the purchase of shares, he added.
The family has increased the purchase of insiders through the reinvestment of dividends and increased its proportion of 35.5% in the past nine years via Ramsbury, a vehicle, named after the billionaire Stefaner Persson, one of the greatest private landowners. Including longer family ownership, the Persons control around 70% of capital and around 85% of the voting rights according to the website of H&M.
IninterviewLast year with Bloomberg, H&M Chairman Karl-Johan Persson-Kel of the founders’ speech declared that the family intended to take the company privately. “There are no plans,” he said. “We only buy because we believe in the company.”
Representatives of Ramsbury Invest and H&M rejected a statement.
Analysts like Niklas Ekman from DNB Carnegie say that the regular purchases could be more than a certificate of trust in the retailer. In a reference to customers last month, he estimated that if the family continues to acquire shares at the same pace, a buyout could come in two years. If the family participation achieved 90%, this could require the stocks to be lost.
A Take Privat would “rather based on emotional than on financial motives,” wrote Ekman, since the family has already had a controlling share and the company has managed for a long time with little consideration for minority shareholders.
He led the push to the Patriarch Stefan Persson, 77, who had built in H&M in his 16 years as Chief Executive Officer and more than two decades as chairman in one of the world’s largest fastest fashion retailers. It remains deeply invested in the future of the company.
According to Bloomberg Millionaires Index, Stefan’s assets are 18.6 billion US dollars, mainly in H&M shares, which makes him the richest person in Sweden. He bought the 3,000 hectare Ramsbury estate in 1997 and has since expanded it to 19,000 hectares and built a brewery, a distillery and oil press on the property.
His son Karl-Johan, who took over the H&M chairman in 2020 after working as a CEO, also plays an active role in Ramsbury Invest. In interviews, he expressed frustration with the short -term focus of the stock markets to maximize profits.
“At least in modern times, they never expressed the strong wish to remain public,” said Daniel Schmidt, analyst at Danske Bank. “I would say that transparency was always part of it.”
The H&M stocks reached an all -time high about a decade ago and have since fallen by around 60%, which the group rated at 220 billion crown. The Zara owner Inditex SA, on the other hand, has increased by about 60% during this period.
For the person, the striking share price is undoubtedly a frustration, but also offers a chance by making full control over the more achievable. According to Ekman, the family would cost at least 70 billion crowns for the purchase of the remaining outstanding shares at the current price. That would probably require them to take debts.
According to Charles Allen, analyst of Bloomberg Intelligence, delisting would probably also require a premium.
“If the offer was financed by debt, it can reduce the company’s flexibility,” said Allen. “It would not be really important whether the fault in the company or in the family would be, since the cash flow would have to be redirected from investments in order to pay interest and then repay.”
Operatively, the fast-fashion retailer seems to be captured in the Slow Lane and is faced with the loud demand for his clothing, his violent competition and now US tariffs. The results of the first quarter were weaker than the analysts had expected, and showed that the efforts to push customers back through higher marketing expenses had not brought back bums.
CEO Daniel Erver, an H&M veteran who took over the top job last January, was involved in the determination of the current strategy and still did not reverse the loss of market share in countries such as Germany, France and Great Britain. Attempts to connect with the younger audience again, for example with pop artist Charli XCX, have not significantly increased growth.
“With the share price that is behavior today and now offers a small bonus, this could possibly be cheaper if the share price will recover at some point in the future,” said Mads Lindegaard Rosendal, Senior Analyst at Danske Bank. He said that the potential risk of a private is one of the reasons why Danske Bank has a “underweight” rating for H&M.
As one of the short -circuited stocks in Europe, a Buy -Out could force empty sellers to handle their negative bets on H&M and send the shares up. According to S&P Global Market Intelligence, the borrowed stocks, an indication of short interest, were 21% of the Free Float from H&M on June 4th.
H&M was criticized due to a lack of transparency about sudden changes in administrative and the only company in Stockholm’s benchmark index that does not reveal the participation of his top expert team.
“As a listed company, management is obviously checked more than if they were private, but probably also incentives for management and other employees who would not be available if it were private,” said All of BI.
Anders Oscarsson, the head of the shares at AMF, one of the largest pensioners in Sweden and the largest non-family share owner, said he said nothing about taking H&M privately, and such a step would be a big loss for investors.
“It would be sad if the company disappeared on the stock exchange,” he said. “If we achieve returns from the stock exchange, we need strong companies listed.”
However, if the family’s purchases lead to a significant deterioration in the liquidity of the stock, this would not be a good result. “It could be a bit like the Hotel California – where you can neither check in nor check in.”
This story was originally on Fortune.com
