A divorce in the rain is likely to be amicable! A very large majority of Accor's shareholders (88.5% of those present, representing 76% of the capital) has approved the proposed demerger dreamed up by the Chairman Gilles Pélisson at the request of the two largest shareholders (Colony and Eurazeo). The doubts of another large shareholder, FSI-Caisse des depots, only managed to get the backing of a tiny minority.
The exceptionally adverse economic, financial and stock market climate today did not have any negative impact on the shareholders. It is true that the severity of the times and the uncertainties as to the strength of the recovery justify rigorous management. And that is precisely what the demerger between the hotel business and services imposes.
In order to deal with substantial indebtedness - 1.3 billion euros - the new Accor, deprived of the cash flow from services, will put the emphasis on its "asset right" strategy, which will enable it to grow its profits and generate cash to finance investments, while considerably reducing its owned assets or assets subject to burdensome leases. |
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Similarly, the services branch, renamed Edenred, freed from having to finance the hotel business, will be able to be more generous with its shareholders and will distribute a larger share of its profits than the average CAC 40 company.
Overall, analysts think that the new Accor and Edenred should soon have the benefit of valuations of 26-29 euros and 11-14 euros respectively, with prospects for significant improvement having regard to competitors' PE ratios. These are figures that suggest a recovery from Accor's current share price, which would enable its owners to continue to benefit from the outperformance of the shares in comparison with the CAC 40 in the last year, and since the beginning of 2010.
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Two Accors are better than one
