EssilorLuxottica's Board Nixes Proposals for New Directors

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CHARENTON-LE-PONT, France—The struggle over governance of EssilorLuxottica took a new turn yesterday when the company’s board of directors of EssilorLuxottica rejected proposed resolutions by the Valoptec Association and investors led by Fidelity International to appoint additional independent directors at its May 16, 2019 general meeting. In a statement released yesterday, EssilorLuxottica said, “The board of directors recommended at the majority that the shareholders vote against all the proposed resolutions which, if approved, would result in a clear breach of the combination agreement and in a potential disruption for the activities of the board.”

Last week Bloomberg, citing a report in La Repubblica, said that investors led by Fidelity International are seeking to install two independent directors at EssilorLuxottica to "unblock" the stalemate at the newly merged EssilorLuxottica as a management clash intensifies between the Italian and French factions. The international funds backed by Sycomore, Edmond de Rothschild and activist Phitrust made the request to appoint two new directors at EssilorLuxottica’s annual meeting on May 16, according to La Repubblica, which did not identify its sources.

On April 18, Valoptec submitted a draft resolution to EssilorLuxottica seeking to appoint Peter James Montagnon as an independent director. Montagnon was described by Valoptec as “a British national” with “international expertise and a wealth of experience in governance and investment, resulting from his involvement in international organizations and his mandates as a director.”

The Valoptec Association consists of current and former Essilor employees who comprise the Essilor Group’s second largest shareholder.