Activist investor to push for new debt deal at PagesJaunes
PARIS (Reuters) - Activist investor Guy Wyser-Pratte said he is seeking board seats at French phone directories company PagesJaunes PAJ.PA to force its biggest shareholder - U.S. private equity firm Cerberus - to cut the group's debt.
PagesJaunes has been struggling with big debts since a private equity buyout of the company in 2006. The firm has also had to cope with the impact of the Internet on its printed directories businesses.
Wyser-Pratte, a U.S. investor who focuses on European companies, has built up a 0.85 percent stake in PagesJaunes, which he said was enough to mount a challenge to Cerberus CBS.UL.
Cerberus became PagesJaunes' biggest shareholder, with 28 percent of voting rights, via the purchase of debt from Mediannuaire, a holding company controlled by Goldman Sachs Group (GS.N) and private equity firm KKR & Co (KKR.N).
A restructuring earlier this year has cut the debt but Wyser-Pratte said this had not done enough for PagesJaunes.
"These people have left them hocked up to the eyeballs, and it's not right," told Reuters on Monday. "That's the first goal, get this thing renegotiated, and with two people on the board ... I think we've got a good shot at it."
He plans to seek investor support to vote himself and Pierre Nollett as independent directors at PagesJaunes' June 5 shareholder meeting.
Wyser-Pratte said his 0.85 percent stake was enough to propose resolutions for the annual meeting.
"We're on the side of management," he said. "They feel like they've gotten short shrift. They're in shackles with this debt."
Cerberus was not immediately available for comment.
PagesJaunes' net debt was more than four times its earnings before interest, tax, depreciation and amortization in 2012, compared with an industry average of 0.78 times, according to Thomson Reuters data.
PagesJaunes said it had received a letter from Wyser-Pratte demanding the appointment of two board members. The company declined further comment.
Shares in PagesJaunes, which is renaming itself Solocal Group, rose 4.2 percent.
"Guy Wyser-Pratte's activist stance is fuelling speculation on the stock," Gilbert Dupont analyst Jean-Baptiste Sergeant said. "If he manages to unite the minority shareholders, he'll seek a sale to a big group and work out the problem of the remaining debt."
(Editing by Jane Merriman)
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video