A Paris-based commercial court has appointed its former president, Frank Gentin, as special representative (mandataire ad hoc) to broker peace at the EssilorLuxottica (Essilux), which is bogged down in a power struggle between its executive chairman and main shareholder, Leonardo Del Vecchio, and its executive vice-chairman, Hubert Sagnières.
We understand that there is pressure for Gentin to come up with an opinion on the issue in time for the annual meeting of the new group, scheduled for May 16, or even by the end of this week.
Gentin enjoys a strong reputation. He was the president of the court from 2012 and 2016 and he solved several corporate controversies involving large companies including a big one that pitted the French luxury goods group LVHM and one of its major peers, Hermès International, back in 2014.
According to a power-sharing deal stipulated as part of the so-called combination agreement between Luxottica and Essilor, Del Vecchio and Sagnières have the same rights. The company's 16-member board is also equally divided to represent the Italian and French sides of the business. EssilorLuxottica is the result of the merger in October 2018 of the French lens manufacturer Essilor and the Italian frame maker Luxottica. But, both managers have accused the other of breaching the accord, prompting Del Vecchio to file an arbitration procedure with the Paris-based International Chamber of Commerce (see Eyewear Intelligence Vol. 20 n°4+5).
The exact unfolding of Gentin's appointment remains unclear, as Essilux has not even officially announced his arrival. His nomination stems from a separate legal procedure, which was started from either the French or Italian side. According to various sources, it was engaged by the French interests in the group, while the Italian daily Corriere della Sera claims that the move was sponsored by Delfin representatives on the board. A French daily, Les Echos, reported that the Italian members of the board had boycotted one of its meetings at the beginning of April. In any case, according to Italian media, Gentin has the support of Delfin, Del Vecchio's holding company, which owns 32.05 percent of Essilux.
The Italian press added that the court rejected a request to suspend the board or suspend the voting rights of Delfin's representatives.
The board has now has to define a common response to Delfin's legal challenge. But if the gridlock persists, Gentin may have to intervene by outlining the company's defense stance and choosing who would represent the company in the arbitration. Gentin immediately entered the fray and was already present at Essilux's board meeting the day of his appointment, April 26. The board meeting ran all day and focused on the arbitration procedure.
An Essilux source said that Gentin's role is limited to reaching a common defense strategy against Delfin in the arbitration and that he is not intervening in the group's management. It also stressed that the recourse to arbitration is contemplated by the group's combination agreement.