2ND UPDATE: Accor Replaces CEO Pelisson Following 'Divergence'
November 03 2010 - 5:59AM
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 5 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, 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 was not immediately available to comment.
While Pelisson was good for managing the transformation of
Accor, now the board seeks someone with a different set of skills
to take the company to the next level of development, a 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), who were not
immediately available to comment.
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.
Pelisson's announced 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 discourse before the decision to split
the company suggested he had been less enthusiastic about the move
than key shareholders.
Accor earlier this month increased its profit target for the
year after third quarter sales showed improved business in its more
expensive hotels in Europe. Along with other hotel groups that were
hit hard by the crisis, the company is starting to see an uptick in
business. Visibility remains low for the industry, however, as
clients wait until the last minute to make reservations, and
Accor's optimism for the end of the year thus far does not extend
into next year.
Accor last month withdrew plans to list its 49% stake in the
French casino operator Groupe Lucien Barriere because of a lack of
investor interest. The plans are part of the company's efforts to
reduce debt as it no longer has the vouchers division which was
traditionally used to fund hotel expansion.
Shares in the company have risen nearly 16% over the past three
months, outpacing a 3% rise in the Paris CAC-40-index on
expectations for a bounce-back in the sector. The hotels sector was
badly affected by the economic crisis as businesses cut back on
employee travel and the sector has lagged others in improving.
At 0911 GMT, Accor shares traded up 0.1% to EUR29.72.
By Mimosa Spencer, Dow Jones Newswires; +33 1 40 17 1773;
mimosa.spencer@dowjones.com