Rexel Fires CEO Provoost After Disagreement on Governanceby and
Patrick Berard named CEO, Wolseley’s Meakins non-exec Chairman
Ouster comes after activist Cevian declares 5 percent holding
Rexel SA ousted Chief Executive Officer Rudy Provoost after a disagreement with the board of directors over a plan at the French electrical-equipment company to split the roles of chairman and CEO.
Provoost “was invited to relinquish his positions” of chairman and CEO as of June 30 following “a divergence of views with the board of directors about the change in governance,” the Paris-based company said in a statement. The move by Rexel, whose shares fell 8 percent, comes after activist shareholder Cevian Capital AB declared in February owning more than 5 percent.
Rothschild banker Francois Henrot will serve as interim chairman and 13-year-company veteran Patrick Berard, 63, becomes CEO July 1, Rexel said. Wolseley Plc Chief Executive Officer Ian Meakins, 59, will join the board and become non-executive chairman starting Oct. 1. Henrot is currently deputy chairman and senior independent director.
The change at the helm coincides with Rexel’s struggles with low commodity prices, a slowdown in China and uncertainty about the North American industrial market, factors which led the company in February to forecast a drop in sales this year. Provoost’s ouster also dovetails with Cevian Capital -- known for lobbying companies for changes -- owning more than 5 percent, according to a filing to France’s market regulator in February. Rexel’s biggest shareholders are Morgan Stanley and Parvus Asset Management, according to data compiled by Bloomberg.
Provoost "came at a time when share ownership was concentrated in private equity’s hands" and that called for a different strategy from the one needed now, Kepler analyst William Mackie said by phone. A “fresh start” is what they need and to focus on rebuilding core markets in Europe and America and concentrating on the North American electric-equipment distribution market, he said.
“Rexel’s interests would be best served by a new governance structure that will allow management to focus all its efforts on implementing and executing the group’s strategy under board oversight,” Henrot said in the statement.
Berard has held a number of senior management positions since joining the company in 2003, and since July headed European operations, the company said. Meakins announced in May that he would retire Aug. 31 from Wolseley, a Zug, Switzerland-based distributor of bathroom materials, heating and plumbing supplies.
Berard has “significant experience in the electrical-distribution industry and
a strong track record at Rexel, especially as head of France,” Morgan Stanley
analyst Lucie Carrier said in a note.
Provoost joined Rexel in 2011 from Royal Philips NV where he was head of the lighting division. He became chairman of the management board in 2012 and then chairman and CEO in 2014 after the company modified its governance a first time amid a change in shareholding structure. Rexel sells switches, cables and plugs to builders and industrial customers and bought Hagemeyer NV of the Netherlands in 2007 to expand in Europe.
Rexel shares fell 8 percent to 11.83 euros at 2:50 p.m. in Paris. The stock has dropped 23 percent during the past year, giving the company a market value of 3.6 billion euros ($4 billion). The shares earlier fell as much as 27 percent, the most since trading began, amid the global market turmoil following the U.K. vote to leave the European Union.