PARIS (Reuters) - AccorHotels (ACCP.PA) said on Wednesday its board opposed an attempt by a group of shareholders to scrap the granting of any further double voting rights to long-term investors.
A group of 14 investors accounting for 2.3 percent of the capital of Europe’s largest hotel group and led by PhiTrust, a Paris-based investment firm, have put forward a resolution to reinstate the “one share, one vote” principle at the company’s annual general meeting (AGM) on May 5.
“Following deliberation, the board of directors unanimously resolved not to approve this resolution,” AccorHotels said in a statement.
“The board emphasised that the value attributed to shareholder loyalty and stability which this double voting rights mechanism for shareholders registered for at least two years contributes to encourage,” it added.
The resolution will, however, be submitted to the AGM, though not as one approved by the board.
PhiTrust has led for years a battle against a law passed by the French socialist government to automatically award double voting rights to long-term “reference” shareholders - a move aimed at deterring short-termism at companies and investors.
The rule, known as the Florange Law, automatically installs that system unless shareholders specifically reject it.
It is known as the Florange Law because the government of President François Hollande adopted the measure in 2014 after battling with the Luxembourg-based steel giant ArcelorMittal over the company’s closing of a mill in Florange, France.
In a statement earlier this month, PhiTrust said that given the participation rate at the 2016 AccorHotels AGM was 66 percent, adopting the “one share, one vote” principle would “avoid a reference shareholder ultimately being able to use the double voting rights system to exercise a blocking minority vote at shareholders’ meetings without having to launch a compulsory takeover bid and without paying the related price”.
PhiTrust’s resolution did not propose cancelling existing double voting rights held as of May 5.
Chinese group Shanghai Jin Jiang is AccorHotels’ biggest shareholder with 12.58 percent of the shares and 11.22 percent of the voting rights, having built its stake since early 2016.
Qatar Investment Authority (QIA) owns a 10.36 percent stake and Saudi Arabia’s Al Waleed Bin Talal a 5.79 percent stake since summer 2016.
The only reference shareholders currently holding double voting rights are investment firm Eurazeo (EURA.PA), with 4.3 percent of the capital and 8 percent of the voting rights, and former managers and founders, with 2.2 percent of the capital and 3.8 percent of the voting rights.
Reporting by Dominique Vidalon; Editing by Mark Potter