EssilorLuxottica Shares Slide as Internal Power Squabble Becomes Public
March 21 2019 - 9:47AM
Dow Jones News
By Cristina Roca
EssilorLuxottica SA (EL.FR) Vice-Chairman Hubert Sagnieres on
Thursday hit back at the company's chairman and largest
shareholder, accusing him of a de facto attempt to take control of
the company, while shares in the eyewear maker continued to fall as
the governance rift at the company came into full public view.
Mr. Sagnieres, the chief executive of French optical-lens maker
Essilor, said the accusations made Wednesday by Delfin, the holding
of Luxottica owner and EssilorLuxottica chairman Leonardo Del
Vecchio, are "serious and false."
"Despite [Mr. Del Vecchio's] denials, a certain number of his
actions reflect a de facto attempt to take control of the new
group, without any premium offered to shareholders," Mr. Sagnieres
said in a press release.
In a release distributed Wednesday afternoon, Delfin said some
Essilor representatives are deliberately preventing Delfin from
exercising its equal share of power, thereby violating the
combination agreement signed in 2017 between Essilor and
Luxottica's owner ahead of the merger in October last year.
In an interview with Le Figaro also published Wednesday
afternoon, Mr. Del Vecchio--who through Delfin owns 31% of
EssilorLuxottica--pointed the finger at Mr. Sagnieres, accusing him
of trying to run the company along with four key managers picked
from the ranks of Essilor.
EssilorLuxottica shares opened lower Thursday after Delfin's
attack. At 1231GMT, EssilorLuxottica shares traded 6.6% lower at
EUR98.12.
Wednesday's news came after months of speculation and investor
concern about tension surrounding the two businesses' combination
and governance. EssilorLuxottica shares have lost more than 18% of
their value since the merger took effect in October following a
complex share-swap.
Responding to Delfin's accusations, Mr. Sagnieres said his
focus, when dealing with EssilorLuxottica's future governance, has
been on "ensuring compliance with the merger agreements and a
governance in line with that of a large international public
company," and on initiating the search for a new chief executive
for the recently-created company.
Mr. Del Vecchio on Wednesday told Le Figaro that a headhunter
hasn't yet been appointed for the search for a chief executive as
he and Mr. Sagnieres haven't been able to agree on the qualities
required for the role.
Mr. Sagnieres also contradicted Mr. Del Vecchio's claim that he
hadn't tried to nominate his right-hand man for the post of
EssilorLuxottica CEO. Mr. Sagnieres alleged that Mr. Del Vecchio
had announced his intention to unilaterally delegate the CEO role
at EssilorLuxottica to Mr. Francesco Milleri, his ally, as early as
November last year.
Write to Cristina Roca at cristina.roca@dowjones.com;
@_cristinaroca
(END) Dow Jones Newswires
March 21, 2019 09:32 ET (13:32 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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