* Role split decided after hedge fund raised pressure
* AGM rejects fund resolution to oust CEO
* Top shareholder wants end to lock-up agreement
(Adds vote result)
By Gilles Guillaume
PARIS, May 15 French cable maker Nexans
bowed to shareholder pressure for a management shakeup
on Thursday and split chairman and chief executive Frederic
Vincent's dual role, although shareholders also rejected a
motion to oust him.
Vincent will remain chairman while Chief Operating Officer
Arnaud Poupart-Lafarge will take over as CEO, the company said
in a statement that came just hours ahead of the company's
annual meeting in Paris.
Nexans also said its top shareholder, Chilean copper group
Invexans, had asked to end the agreement that locks its holding
at between 25 and 28 percent and gives it the right to appoint
three board directors. Invexans owns 28 percent of Nexans.
The Chilean group said in a statement it was not seeking to
take control of the French company and had no plans to cut its
stake or increase it above 30 percent.
Hedge fund Amber Capital had planned to lead a rebellion
against Vincent, having forced onto the agenda a resolution to
dismiss him from the board citing underperformance since he took
over in 2009.
The motion failed however, according to a Nexans
spokesperson, with 65 percent of shareholders voting to reject
the resolution, saving Vincent's place on the board.
Still, a third of shareholders voting for the CEO to be
pushed off the board is not a victory for management. It will
also keep pressure on Nexans' third biggest shareholder, the
French government investment vehicle BPI.
"We welcome this totally unexpected change of tack by the
board. It's up to shareholders to decide now," a spokesman for
Amber Capital said about the role split.
Amber has 5.5 percent of Nexans and had won the backing of
two major shareholder advisory groups, ISS and Proxinvest, for
Nexans reported a loss in 2013 and skipped its dividend for
the year after being forced to raise new capital in October,
blaming a lack of growth in Europe and industry overcapacity.
Nexans has said Thursday's vote was a matter for
shareholders. Until Thursday's decision it resisted Amber's call
for a role split, noting that the combined structure is common
Nexans said it would decide within eight days how to react
to Invexans' request. Invexans is a holding company of the
70-year-old Chilean copper goods business Madeco, which in turn
is controlled by the Chilean Luksic family's Quinenco.
Madeco became a shareholder in 2008 when it sold its own
cables division to Nexans. Under the current shareholder
agreement it must hold at least 25 percent of Nexans until Nov.
26, 2015, and not more than 28 percent.
The second- and third-largest shareholdings in Nexans belong
to Manning & Napier Advisors, a U.S. value fund, and BPI, the
French government investment vehicle, both with just under 8
BPI bought its stake in 2009 to "stabilise and reinforce"
the company's shareholder base. BPI declined to comment on the
Nexans and Italian rival Prysmian are the dominant
players in an industry that designs, produces and installs
cables, mainly for the energy and telecom sectors.
Nexans is also in the crosshairs of a number of hedge funds
betting on losses in its shares.
According to data from Markit, about 10 percent of Nexans'
outstanding shares are on loan, making it one of the most
shorted stocks on the French bourse.
Short selling involves selling borrowed shares in the hope
of buying them back more cheaply later and pocketing the
difference. Short-sellers usually target struggling companies
underperforming their sectors.
Shares in Nexans, which had been briefly suspended from
trading pending the statement, closed down 3.07 percent at 41.68
(Additional reporting by Andrew Callus, Blaise Robinson and
Matthieu Protard; writing by Michel Rose; editing by Andrew
Roche and David Evans)