News
Carrefour targeted by private equity
| World's second largest retailer Carrefour continues to be targeted by American private equity. In what is emerging as a raid on the retailer's valuable real estate property, Colony Capital and French billionaire Bernard Arnault have bought up 9.1 per cent of the company's shares.
They have also signalled their preparedness to take over a further 13 per cent of the shares - which carry a preferential voting strength - if Carrefour's largest shareholder, the Halley family, wants to sell. Would this happen, the Colony-Arnault private equity consortium would control a third of the votes in Carrefour, which in reality would allow them to dictate their will. Preparing a raid on Carrefour property Colony Capital LLC founder Thomas Barrack is now demanding Carrefour to start selling off its store property. According to Bloomberg.com yesterday, Barrack said the company should consider selling and leasing back stores to finance expansion. Barrack is clear about what he expects from Carrefour CEO José Luis Duran: - Duran is perfectly capable of launching and implementing such a program, he said according to the US financial news website. Carrefour's competitiveness would suffer There is no question about it - a forced sale of Carrefour's real estate property would weaken the company's long term competitiveness. With the already low margins in supermarket and food retailing, the high rental costs for stores would hit hard at the bottom line. Hans-Joachim Körber, CEO of the Metro Group, proved this point in his recent statement on the German commerce giant's expansion plans: - We will not hurt our commercial activities on the longer term by externalising our real estate property, he said about his own company. Unions will fight for Carrefour jobs and conditions The position of workers and their trade unions is clear. They will not stand idle if the new private equity investors begin stripping Carrefour of its property. A property sale would seriously hurt the company's capacity to continue providing stable employment for its almost 500,000 workers world-wide. It would also cause an increased downward pressure on employment and working conditions, as has been seen in so many previous private equity take-overs. At a recent meeting in Paris, Michel Enguelz, general secretary of the European Works Council and Jan Furstenborg, Head of UNI Commerce, conveyed these views to top Carrefour management. They underlined that the workers and their unions will not accept any stripping of the company's real estate assets, and that they will take appropriate action if this would begin to happen. They also asked management to convey the union message clearly to the company's supervisory board and to the new shareholders. European Works Council involved The steering committee of Carrefour's European Works Council will meet after the Easter holidays to discuss the recent developments with company management. UNI Commerce and its affiliates are monitoring the situation closely, and are prepared to convene the trade unions concerned at short notice. Carrefour's personnel is well unionised in almost all the countries where the company is present, and closely networked both globally and in Europe through UNI Commerce and the European Works Council. |
