PARIS — The commercial court of Paris on Friday designated Frank Gentin, its former president, as the ad hoc agent to try and break the deadlock at EssilorLuxottica, the world’s largest eyewear company.
Top management from the French and Italian factions of recently merged EssilorLuxottica have been clashing, and the company’s board of 16 directors is split into two factions equally divided between the former Essilor and Luxottica camps.
As previously reported, EssilorLuxottica’s board met Wednesday and voted down a proposed complementary resolution submitted by shareholders, including Valoptec and some institutional investors, for the addition of one or two independent board members ahead of the eyewear giant’s general meeting on May 16.
“The board of directors recommended at the majority that the shareholders vote against the proposed resolution which, if approved, would result in a clear breach of the combination agreement and in a potential disruption for the activities of the board,” the company said in a statement Wednesday.
Leonardo Del Vecchio, Luxottica’s founder, through his family holding Delfin in late March deposited a request for arbitration at the International Chamber of Commerce “to ascertain violations” to the Essilor and Luxottica merger inked in January 2017 and to the company’s corporate governance policies.
EssilorLuxottica’s executive vice chairman Hubert Sagnières, who prior to the merger served as chairman and chief executive officer of Essilor, responded that “despite [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.”
Sagnières further reproached Delfin for “serious and false accusations regarding the group’s governance and management.”
EssilorLuxottica was formed through the 46-billion-euro merger of Italy’s Luxottica, the producer of eyewear under license for brands including Giorgio Armani Group, Bulgari, Burberry, Chanel, Coach, Prada and Versace, and France’s Essilor, billed as the world leader in ophthalmic optics and a key player in visual health.
The merger took about one year to complete, due to investigations by competition authorities, and was only finalized on Oct. 1, 2018.
During a call with financial analysts on March 6, EssilorLuxottica executives said the group was on track to appoint a new ceo — from either inside or outside the company — by the end of 2020. But the company stock sank more than 6 percent later that same day, as the market felt it was facing two independent companies.
On April 17, EssilorLuxottica said its nomination and compensation committee had initiated the search for a future ceo with the support of two international executive search firms, Russell Reynolds Associates and Eric Salmon & Partners.
EssilorLuxottica’s net profit on a pro-forma, adjusted basis — which consolidates the two companies’ results starting from Jan. 1, 2018, and adjusts them for one-off or otherwise unusual expenses — declined 1.7 percent to 1.87 billion euros for the full year. Sales eased 1.2 percent to 16.16 billion euros.