Accor Board Fires CEO Hennequin Over Strategy DifferencesNeil Callanan
Accor SA, Europe’s largest hotel operator, fired Chairman and Chief Executive Officer Denis Hennequin after he disagreed with the board over the pace of the company’s expansion plan.
The board unanimously decided to remove Hennequin with immediate effect during a meeting yesterday that he had requested, the Paris-based company said today in a statement. Yann Caillere, who had been president and chief operating officer, will become CEO, Accor said. Philippe Citerne was appointed non-executive chairman.
Accor, owner of the Sofitel and Ibis brands, said in February it will restructure 800 hotels as part of a plan to scale back the number of properties it owns. The company plans to open 30,000 rooms a year through 2016 and by that time would operate 40 percent of its rooms under franchise agreements and 40 percent under management contracts. Accor will own or lease 20 percent of the rooms.
Hennequin had expressed “reservations” about a plan to speed up the implementation of the strategy before the board voted to terminate his employment contract with immediate effect, according to the statement.
Accor was down 49 cents, or 1.9 percent, at 24.92 euros at the 5:30 p.m. close of trading in Paris, the lowest since Nov. 21. The shares have dropped about 5 percent in the past six months, reducing the company’s market value to 5.66 billion euros.
The company sold its chain of more than 1,100 Motel 6 hotels in North America to Blackstone Group LP for $1.9 billion last year and used the proceeds to expand in markets such as Asia. Some shareholders said Hennequin hadn’t sold properties quickly enough and was too slow to adapt to rising online reservations, French newspaper Le Figaro reported yesterday, without saying where it got the information.
“There could be a scenario of a real estate demerger,” Exane BNP Paribas analysts including Matthias Desmarais wrote in a note to clients today. Under that scenario, there would be “limited incremental value creation compared to the” company’s existing strategy.
The analysts downgraded Accor to neutral from outperform. While Credit Suisse AG last week cut its rating to underperform from outperform, S&P Capital IQ raised the shares to strong buy.
Accor has 450,000 rooms at more than 3,500 hotels in 92 countries, according to its website.