Princess Motor Yachts owned by the richest man in the world !

[roa312]

To expand on the ownership story (for those interested), I understand that in 2008 Princess was acquired by L Capital, an investment fund sponsored by LVMH and the Arnault family. This was a joint transaction together with another private equity firm, Cobepa SA (originally backed by several family offices). According to their website, Cobepa acquired a 22% equity stake.

In 2016, America-focused private equity firm Catterton merged with L Capital+L Real Estate (owned by LVMH and Groupe Arnault - the family holding company of Bernard Arnault) to create private equity firm L Catterton. The partners in Catterton became 60% owners in L Catterton with 40% owned by LVMH/Groupe Arnault. I understand that the shareholding in Princess Yachts is now owned through the L Catterton Europe IV fund (established in 2017) but I don't think there's any public details on the ownership stakes of other limited partners - presumably the Arnault family must have a significant indirect stake (I'm not sure if this is a majority stake), but I note that on the L Catterton website the investment in Princess Yachts is now listed under venture/minority investments (link). Maybe someone else knows more?

 

[[194224]]

It’s not obvious at all, and is in most cases wrong.

The only obvious thing was my ignorance. I am now better informed, thank you.

 

[Parabolica]

I think you inadvertently touch there on Princess’s big mistake Henry.

it’s a great product, brand and everything else, but only in the sub 24m category. The brand doesn’t stretch profitably any further than that. Poor Chris Gates didn’t get that when he took the firm into 40 metres territory and it destroyed shareholder value. Even their recent retreat to max 95 feet is too big. They should stick at <24 metres and they could then begin to make money, which they haven’ t done for how long - a decade?

When you get to the size Princess stretched to, where folks are spending €$£10m, 20m, or more, the Princess brand does not have enough cachet alongside the others and the build quality (silicone beaded joints in cabinet work, and a list of other sins) doesn’t work.

it’s a great company/product/brand at 24m and they could and did make money in that zone. That’s where they should be. Others make money in 24m+ but they build their boats differently and have brands that work and have cachet/respect/resale demand. And, frankly, these others are pleasingly free of the “we know best and we do it best” slightly annoying arrogance that Princess prospects get, in my exp.

All fair comment In my opinion and the other brands have no doubt found the same. The belief was that to go big meant you got to charge large sums for free air within but the reality was far from it. Mixed with the cashflow problems associated with such large items where the clients very rarely pay their stages on time as their captain has found issue in what is being built and it becomes all too often a perfect storm. As you say, better to chase the smaller product where profit can be found, cashflow is better and the clients likely far less hard work.

In fact the only issue is finding enough of them which i think is where the desire to go bigger first started……

And your last sentence i think refers to a directive led by Mr Gates when he was at the helm. He’s certainly far humbler person now he’s dealing with us humans again.

 

[Zing]

Very often not true, btw

Can you explain please? I understand a court may fix a case of minority shareholder oppression by forcing a sale, but I don’t think a minority shareholder has that power or right.

 

[jfm]

In 2016, L Capital, LVMH, and Financière Agache (previously Groupe Arnault, the familly holding company of Bernard Arnault) combined/partnered to create private equity firm L Catterton.

That misses a big point: ,the longstanding private equity firm Catterton combined with those others to create L Catterton.

 

[jfm]

Can you explain please? I understand a court may fix a case of minority shareholder oppression by forcing a sale, but I don’t think a minority shareholder has that power or right.

I don't want to create a big thread drift. You wrote "minority shareholders have no power to sell a company, but a majority shareholder can " and that just isn't correct so far as company law/property law (in virtually every country) is concerned. The majority can sell their majority stake and the minority can sell their minority stake, but not vice versa, and neither "can sell the company". And good luck to either, because no-one will want to buy without a discount or something that overrides the nuisance value/risk of the other shareholder.
But that's mostly theoretical. In practice you have squeeze out rules over tiny minorities, and you have schemes of arrangement that give significant power at a 75% level. But much more often, you have shareholder agreements that govern who can sell what, with drag and tag concepts that are google-able, and these agreements override any concepts of majority/minority and are generally a good thing, but to go into all this makes for massive thread drifting. For sure, with the multiple shareholders in Princess, there will be an industrial grade shareholders' agreement that governs any sale of the company. A private document, not google-able.

 

[roa312]

That misses a big point: ,the longstanding private equity firm Catterton combined with those others to create L Catterton.

Sorry, I had forgotten to mention Catterton (will edit the post). A quick google search led me to the original press release (link) which mentions that the partners in Catterton became 60% owners in L Catterton with 40% jointly owned by LVMH and Groupe Arnault. I understand that the Arnault family were already investors in Catterton prior to the merger so I don't know what this means for the family's indirect ownership stake in Princess but I guess it could potentially be just a minority stake?

Furthermore, the potential IPO of L Catterton (link) could possibly dilute the shareholding even further but that is speculation on my part.

 

[jfm]

Yup. Anyways, I think we are both agreeing that the premise to this thread and its title are a touch wrong.

Rather a pity perhaps, because M Arnaud is a grand master at developing brands and perhaps if he had been able to find time to take more interest in Princess he could have worked some wonders.

 

[Zing]

I don't want to create a big thread drift. You wrote "minority shareholders have no power to sell a company, but a majority shareholder can " and that just isn't correct so far as company law/property law (in virtually every country) is concerned. The majority can sell their majority stake and the minority can sell their minority stake, but not vice versa, and neither "can sell the company". And good luck to either, because no-one will want to buy without a discount or something that overrides the nuisance value/risk of the other shareholder.
But that's mostly theoretical. In practice you have squeeze out rules over tiny minorities, and you have schemes of arrangement that give significant power at a 75% level. But much more often, you have shareholder agreements that govern who can sell what, with drag and tag concepts that are google-able, and these agreements override any concepts of majority/minority and are generally a good thing, but to go into all this makes for massive thread drifting. For sure, with the multiple shareholders in Princess, there will be an industrial grade shareholders' agreement that governs any sale of the company. A private document, not google-able.

I see, you were referring to majority shareholders not usually being able to compel the sale of minority shares in a private company, understood. Whereas I was really referring to the ability to sell the control of the company, not so much a sale of the entirety of it, a sale of control being something only majority shareholdings can do. Control is usually the essential thing that is important to investors as it is with Princess.

Still, it seems we don’t really know who or which groups or nationalities even have control of Princess. Presumably hidden in a web of ownership structures. I guess Princess will be dealing with the new reporting requirements on ultimate beneficial owners now.

 

[jfm]

OK, well. Your whole first para is very basic level and disconnected from the real world, especially the last sentence of the para. And I don't agree much of your 2nd para either, but no matter!

 

[MapisM]

For sure, with the multiple shareholders in Princess, there will be an industrial grade shareholders' agreement that governs any sale of the company.

I think in many cases plain vanilla economic convenience can go to an even greater length than shareholders' agreements.
I mean, in the particular case of Prin, I suspect that all shareholders would be happy to sell regardless - if only there were a buyer, that is...

 

[jfm]

I think in many cases plain vanilla economic convenience can go to an even greater length than shareholders' agreements.
I mean, in the particular case of Prin, I suspect that all shareholders would be happy to sell regardless - if only there were a buyer, that is...

Indeed!

 

[henryf]

I think you inadvertently touch there on Princess’s big mistake Henry.

it’s a great product, brand and everything else, but only in the sub 24m category. The brand doesn’t stretch profitably any further than that. Poor Chris Gates didn’t get that when he took the firm into 40 metres territory and it destroyed shareholder value. Even their recent retreat to max 95 feet is too big. They should stick at <24 metres and they could then begin to make money, which they haven’ t done for how long - a decade?

When you get to the size Princess stretched to, where folks are spending €$£10m, 20m, or more, the Princess brand does not have enough cachet alongside the others and the build quality (silicone beaded joints in cabinet work, and a list of other sins) doesn’t work.

it’s a great company/product/brand at 24m and they could and did make money in that zone. That’s where they should be. Others make money in 24m+ but they build their boats differently and have brands that work and have cachet/respect/resale demand. And, frankly, these others are pleasingly free of the “we know best and we do it best” slightly annoying arrogance that Princess prospects get, in my exp.

I always respect your knowledge on these matters, I’m firmly in the sub 24m club so I’m happy to take what I’m given ?

In terms of Princess ownership I know its the investment arm, or one of the investment arms of LVMH but ultimately Mr B has his finger in the pie somewhere and he’s just pipped Elon to the top spot ?

We had someone on the boat on a charter this year who is involved in the sale, you will know the bank. He said everyone wants to buy a Princess boat but not the company. I got the impression it wasn’t going to be given away.

The profitability thing is a frustrating one. At the moment parts limitations have worked against them. The production line needs feeding on time and in order, when that doesn’t happen it hits hard. Could they ultimately be profitable? Yes, I think so. Would I want to run the ship? No thank you, I’ll just stick with the boat. I’ve had some interesting factory tours this time, (we’ve always bought stock boats up to now). I’m going to post up a build thread at some point which will be in stark contrast to your epic. I’m accepting of the limitations. I guess I‘m just looking at the usability and practicality then getting out at the end. If Princess ceased working for me I’d buy another brand rather than try to change them.

Ultimately your bill and my bill are going to be very different numbers but I hope we each get a boat that works for us.

Currently out in Thailand where the boating opportunities are epic…..

?

 

[henryf]

For the same price as Haslar marina in Gosport ?

The photos are of Thailand not Gosport just for clarity.

 

[PowerYachtBlog]

As everyone knows Elon Musk is the world’s richest man…….

…..until now. It seems his Twitter buying and a softening of Tesla share price has knocked him off the top spot.

Step in Bernard Arnault the big cheese at LVMH ultimate owners of British motor yacht builder Princess.

Press, Media, Exceptional places and arts - Other activities – LVMH And yet he still does not acknowledge it....

It could be the poorest, as long as he gives a good service.

I personally do not like most big brands group. You call them for something and will tell you to speak to your dealer, dealers tells you he is waiting from the firm and so on so forth.
Sometimes it becomes an annoying back and forth....
Sure it also depends the dealer, but if a dealer is not up to standard in after sales what you gonna do....

Gobbi gave me a better service before it became part of Azimut-Benetti Group in 2002. It is not that the service was bad, but from 1994 to 02 it was more simple and faster.

 

[benjenbav]

I’d be surprised if M Arnault, or anyone else with a net worth in the hundreds of billions spends that much time thinking about companies turning over £300m which don’t quite wash their faces profit-wise owned by investment funds managed by remote minority vehicles.
But the linkage is a fun fact and I’d be excited if the new year was bringing me a gorgeous new P55 for sure. ?

 

[TonyR123]

henry - talking of bills - isn't your boat due for completion shortly?

 

[henryf]

Yes, I’m expecting completion early in the new year. It had made great progress when we visited the factory in November including engine installation which was the worry - was hoping to avoid installing the engines out of sync.

I will try to sort out the build thread.

Henry