Even in France, a minority shareholder sometimes still gets the last word, as Christophe Cuvillier found out this week.
The French CEO of Unibail-Rodamco-Westfield (URW),
the world’s largest shopping center operator, was thanked in a press release on Wednesday evening for services rendered. On New Year’s Day, he will be allowed to leave his office in the Parisian embassy area for good to Jean-Marie Tritant, who has been leading the American branch of the company for two years and who will already be appointed as operational director (COO) during the transition period.
It was precisely the purchase of that American leg that marked the beginning of the end for Cuvillier in 2018. The real estate group, itself created from the marriage of the French Unibail with the Dutch Rodamco, then put 21 billion euros on the table for the Australian Westfield, which operates dozens of large shopping centers in the US.
The purchase of the monster quickly became a burden. While the balance sheet groaned under debt of some 20 billion euros, rental income came under pressure due to the bankruptcy of several large retail chains and the departure of major tenants such as the electronics chain Best Buy. And then the corona crisis was yet to come. The shareholders paid the bill. Since the purchase of Westfield, about three quarters of the group’s stock market value has evaporated.
The fact that Cuvillier wanted to relieve his balance sheet with a capital round of 3.5 billion euros was the signal for the exhausted shareholders to revolt. Moreover, the two ‘resistance leaders’ were not the least: Léon Bressler, who himself headed the real estate giant from 1992 to 2006, and the French tech emperor Xavier Niel, the founder of the telecom group Iliad, which operates the operator Free, among other things.
Together they only own a good 5 percent of the company, yet they got enough votes at an extraordinary shareholders’ meeting to stop the capital round.
Moreover, the shareholders – including the Dutch pension fund APG – also voted the resistance leaders on the board of directors, with Bressler even in the role of chairman. Their ally, the Spanish businesswoman Susana Gallardo – the wife of the French ex-Prime Minister Manuel Valls – was also appointed director. With that, the insurgents have three of the 12 seats in their hands. Their first policy act was to dismiss Cuvillier.
It shouldn’t be a problem for the 57-year-old manager to find another top job, if he still wanted to. Cuvillier made a career for real estate in consumer-oriented sectors. He led the French luxury division of L’Oréal, the furniture chain Conforama and the book and multimedia chain Fnac.
Cuvillier is also more of a world citizen than a Frenchman. His father was a diplomat who was the French ambassador to our country at birth. Etterbeek was his very first place of residence, but he also studied in Barcelona and Berkeley (San Francisco).
Bressler and Niel want to reduce the debt of the group by displaying American shopping centers en masse. Whether it will come to that will be clear from the new strategic plan that Tritant must now draw up. If the advent of corona vaccines ushers in a rapid rebound in the economy, the US selloff may become a little less urgent.
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Investors are not really reassured, if you can rely on the first price reaction. The stock lost 3.7 percent to 56.64 euros on Thursday.
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