By
Reuters
Published
Jun 21, 2011
Reading time
2 minutes
Download
Download the article
Print
Text size

Carrefour to face stormy AGM, governance under fire

By
Reuters
Published
Jun 21, 2011

June 21 - Carrefour will face an angry annual meeting on Tuesday, with shareholders exasperated by three profit warnings in less than a year and critical that Europe's top retailer is not acting in the interest of all its shareholders.

Carrefour
Thai shoppers leave the French-owned Carrefour convenience store in Bangkok (Photo: Corbis)

Many investors argue Carrefour is too influenced by its key shareholder Blue Capital, which combines luxury billionaire Bernard Arnault and U.S. property specialist Colony Capital.

Europe's top retailer on Friday said first-half operating income in France would fall 35 percent, raising fears about its full-year outlook and dragging down its shares to a two-year low.

"How much longer can the underperformance of Carrefour continue, one may wonder?" ING analysts asked in a note headlined "A Greek tragedy in France".

Chief Executive Lars Olofsson will be under pressure on Tuesday to reassure investors he can stilll deliver on Carrefour's turnaround plan and notably the revamp of its ailing French hypermarkets, analysts said. .

Olofsson also badly needs to secure shareholder approval for plans to spin off and list Dia, the world's third largest discount chain, in what would be the latest attempt to realise the value of Carrefour's assets. .

Olofsson may also face questions at the meeting about a possible merger of Carrefour's Brazil unit and local rival Pao de Acucar

Carrefour's unions are planning protests outside the AGM, to be held at a shopping centre next to the Louvre museum in the heart of Paris.

The unions view the Dia spin-off plan as a step toward a future break-up of Carrefour designed to allow Blue Capital to recoup its losses.

Blue Capital, which owns about 13.5 percent of the equity and 20 percent of the voting rights at Carrefour, was a driving force behind a plan to spin off all of Dia and the now shelved plan to spin off 25 percent of its European property assets.

By Dominique Vidalon
(Editing by David Cowell)

© Thomson Reuters 2024 All rights reserved.

Tags :
Retail