Bonds News

UPDATE 2-Accor ousts CEO to speed up disposals, franchises

* CEO Gilles Pelisson to leave on Jan. 15

* Denis Hennequin, head of McDonald’s Europe, to succeed him

* Analysts see acceleration of asset sales, hotel franchises

* Accor shares up slightly, no major strategy shift seen

(Recasts with analyst comments, share reaction, details)

By Dominique Vidalon

PARIS, Nov 3 (Reuters) - Accor ACCP.PA ousted Chief Executive Gilles Pelisson and put McDonald's MCD.N Europe head Denis Hennequin at the helm, a move seen accelerating asset sales and franchising while boosting returns for key investors.

Pelisson oversaw the separation of Accor's hotels -- which range from luxury brand Sofitel to budget Ibis -- from its prepaid services unit by creating Edenred EDEN.PA.

The split was at the urging of key shareholders Eurazeo EURA.PA and Colony Capital LCC, which own a combined 27.36 percent of Accor and command four of Accor's 11 board seats.

During his five-year stint as CEO, Pelisson sold non-core assets and shifted Accor towards a less-cash consuming business model, increasing the number of hotels operated under franchise deals or variable-rent leases.

Nevetheless, the fourth-largest hotel group behind the InterContinental IHG.L, Marriott MAR.N, Starwood Hotels HOT.N chains said on Wednesday it was moving into a "new phase in its development" and that the board and Pelisson "recognised the strategic divergences between them".

Analysts said the decision showed Eurazeo and Colony were losing patience and wanted higher returns on their investment, although it came at a time when Accor was starting to benefit from a recovery in the global hotel industry and was also making strong headway in selling assets. [ID:nLDE69H1F8]

Stock market reaction to the announcement was muted. Accor shares were trading up 0.6 percent at 29.875 euros at 1215 GMT as investors said they expected no major strategy shift but merely a quickening of current strategy.

“Despite an acceleration in 2010 of the group’s transformation initiated in 2005, the board and notably the main members which represent the two main shareholders Colony Capital and Eurazeo obviously feel the pace is not fast enough,” Raymond James analyst Bruno de la Rochebrochard said.

Accor shares have gained 9 percent this year and trade at a premium to rivals at 23 times 2011 earnings versus 17.6 for InterContinental.


Hennequin, 52, who has been a director at Accor since last year, will become executive director as of Dec. 1 before taking over the roles of chairman and CEO on Jan. 15.

Pelisson will remain non-executive chairman of the board until Jan. 15.

Hennequin joined McDonald’s in 1984 and was appointed chairman and CEO of McDonald’s Europe in 2005.

“In this capacity, he notably played a key role in the chain’s development in Europe by implementing a strategy based on the development of franchising and a policy of profitable, dynamic and ambitious growth,” the Accor statement said.

CM-CIC analyst Kim-Anh Bassot said the choice of Hennequin reflected “the will of the group’s shareholders, notably Eurazeo and Colony Capital, to accelerate Accor’s expansion in franchises”.

Accor has said it wants to operate over 70 percent of its hotels under management contracts, franchise agreements or variable-rent leases by 2013 to raise cash and cut debt.

“The message the board is sending is very clear: Dennis Hennequin is a franchise and brands specialist.....and his focus will be to accelerate the group’s optimisation,” Natixis analysts said in a note.

Accor took on 1.2 billion euros of the group’s 1.6 billion euros of debt following the Edenred spin-off.

It has been selling non-core assets to cut debt but in September it had to withdraw its offer to sell its 49 percent stake in French casino opeator Lucien Barriere after the initial public offering did not attract enough interest from investors.

Several analysts said Pelisson may also be paying the price of that failure. (Reporting by Dominique Vidalon; Editing by James Regan and Michael Shields)