3rd UPDATE:Accor Replaces CEO Pelisson Following 'Divergence'
November 03 2010 - 1:33PM
Dow Jones News
The board of French hotels company Accor SA (AC.FR) Wednesday
said it is replacing its Chief Executive Gilles Pelisson, who
oversaw the company's split from its vouchers business, with Denis
Hennequin, Chief Executive of McDonald's Corp. (MCD) in Europe
following "strategic divergences" between the board and
Pelisson.
Over the past five years at the helm of Accor--the company
behind the Motel6 budget chain in the U.S., Sofitel luxury hotels
and the Novotel brand--Pelisson, 53 years old, has restructured the
company by selling off non-core assets and hotel properties,
replacing them with long-term leases, and separating the highly
cash-generative vouchers business into a separately listed company,
Edenred (EDEN.FR).
But at a board meeting Tuesday, the board and Pelisson
"recognized the strategic divergences between them, leading them to
organize the departure of Gilles Pelisson," the company said in a
statement. Pelisson wasn't available to comment.
A person close to the board said the two parties disagreed on
how to accelerate the company's growth. Pelisson "pushed specific
acquisition projects," that the board didn't agree with, this
person said.
While Pelisson was well placed to manage the transformation of
Accor, the board is now looking for someone with a different set of
skills to take the company to the next level of development,
another person close to the company said. This will include an
ongoing focus on the restructuring of property assets with a
particular emphasis on developing its network of hotels operated
through franchise agreements, this person said.
Hennequin, 52, has been at McDonald's since 1984 and oversaw an
increase in business volumes making Europe a strong contributer to
group profit, which made him an attractive candidate for the job,
the person said.
"He did not simply copy and paste the McDonald's U.S. offer but
gave it a European dimension," the person also said. He added
Hennequin's "strong grasp of human resources issues--making
McDonald's an attractive place to work--and ability to cultivate
relationships," would be important for the next stage of Accor's
development.
Accor's 11-member board includes four representatives of its key
shareholders, the U.S. private equity firm Colony Capital and
European investment company Eurazeo (RF.FR).
A specialist in managing property investments, Colony Capital is
also known in France for its role in wresting control of retail
giant Carrefour SA (CA.FR) from a historic family shareholder two
years ago, and has been an investor in Accor since 2005.
Colony was involved in the choice of Pelisson to replace Accor's
previous chief executive that same year. While Pelisson is a nephew
of one of Accor's founders, his appointment was seen as a
management upset at the time.
Indeed, Colony and Eurazeo's role has been controversial at
Accor. Early last year, five Accor board members and board chairman
Serge Weinberg resigned in disagreement with the two funds who
merged the position of chief executive and chairman.
Under Hennequin's direction, Accor will move into "a new phase
in its development, during which the definition of priorities and
their execution will be key factors in its success," the board said
in its statement.
Hennequin, who has served on Accor's board since last year, will
take up the new position on Jan 11. In the interim, Pelisson will
continue to act as Chairman of the board of directors.
The announcement of Pelisson's coming departure took many by
surprise.
"It would have been less surprising if the departure had been
announced over a year ago," when the company was contemplating
splitting into two separate companies rather than at a time when
business is improving, said an analyst who declined to be named.
The analyst said Pelisson's comments before the decision to split
the company suggested he had been less enthusiastic about the move
than key shareholders.
And business is improving at Accor. The company increased its
profit target for the year after third quarter sales showed demand
for hotels returned.
Shares in the company have risen over 16% over the past three
months, outpacing a 2.5% rise in the Paris CAC-40-index on
expectations for a bounce-back in the sector. Accor shares closed
Wednesday up 0.5% to EUR29.82.
-By Mimosa Spencer, Dow Jones Newswires; +33 1 40 17 1773;
mimosa.spencer@dowjones.com