Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

EssilorLuxottica tensions exposed as executives fall out

Stock MarketsMar 21, 2019 13:11
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. EssilorLuxottica tensions exposed as executives fall out

By Sudip Kar-Gupta and Blandine Henault

PARIS (Reuters) - Tensions at the top of glasses company EssilorLuxottica burst into the open on Thursday when the group's Italian executive chairman and its French vice chairman accused each other of plotting to take control of the combined group.

France's Essilor and Italy's Luxottica merged last October, creating the world's largest eyewear maker in a 54 billion euro (46.9 billion pounds) deal.

The two groups were supposed to have equal weighting in the leadership of the combined company but they now accuse each other of trying to gain the upper hand, the latest example of squabbles between France and Italy over business partnerships .

In an interview in French newspaper Le Figaro published on Thursday, Leonardo Del Vecchio, the Italian founder of Luxottica and now executive chairman, was quoted as saying Hubert Sagnieres - the French executive vice chairman - listened only to himself.

Del Vecchio, who is the group's largest shareholder, accused Sagnieres of attempting a power grab and said the 400-600 million euros of cost-savings that the merger was expected to yield had fallen behind schedule.

Sagnieres hit back with a statement accusing his chairman of a "de facto attempt to take control of the new group, without any premium offered to shareholders."

The dispute sent shares in EssilorLuxottica down 6.5 percent by 1240 GMT, among the worst performers on both the Paris and broader European markets.

ARGUING ACROSS THE ALPS

The boardroom bust-up left investors and analysts aghast.

"This declaration of internal war can only be damaging to the company," said Gregoire Laverne, fund manager at Roche Brune Asset Management, which has decided against investing in EssilorLuxottica.

Del Vecchio, 83, had previously irked the French side by apparently trying to earmark his right-hand man Francesco Milleri for the chief executive's role. The group has just launched the search for a CEO to be appointed by the end of next year.

With the division of power unclear, analysts say tensions risk undermining the integration process at the group, whose stock has fallen around 10 percent so far in 2019 while Paris' benchmark CAC-40 index has gained nearly 15 percent.

"Investors continue to recognise the industrial logic behind the deal, while remaining concerned around the clear differences between the two more senior execs within the group," wrote brokerage Jefferies.

"Understandably, the critical unknown is just how deep this fracture runs between the two parts of the enlarged group," added Jefferies, which has a "hold" rating on the stock.

France and Italy have had previous disputes concerning companies, while there have been diplomatic rifts between the Paris and Rome governments this year, which led to France briefly recalling its ambassador to Rome.

French media conglomerate Vivendi (PA:VIV) is involved in a boardroom battle at Telecom Italia (MI:TLIT), in which it has a 24 percent stake, and Vivendi also has a pending lawsuit with Mediaset.

EssilorLuxottica tensions exposed as executives fall out
 

Related Articles

Liberty Global Earnings beat, Revenue misses In Q2
Liberty Global Earnings beat, Revenue misses In Q2 By Investing.com - Jul 30, 2021

Investing.com - Liberty Global (NASDAQ:LBTYA) reported on Thursday second quarter earnings that beat analysts' forecasts and revenue that fell short of expectations. Liberty...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email