After Danone, Solvay and Glencore, an activist fund is attacking the luxury giant Richemont

(BFM Bourse) – The activist fund Bluebell Capital, known for running several campaigns against large global corporations such as Danone, Solvay or Glencore, has called for changes to Richemont’s board of directors. In particular, he proposed the candidacy of Francesco Trapani, former boss of the Italian jeweler Bulgari, who is one of the founders of Bluebell. Richemont expects his shareholders to reject the activist fund’s proposals.

The Swiss luxury giant Richemont, owner of the jewelry house Cartier, recommends its shareholders to vote against the candidate of the activist fund Bluebell Capital Partners at the convening of its general meeting published on Monday.

This activist fund, which became known through a dispute with the French food company Danone, the Belgian chemist Solvay and the British pharmaceutical giant GlaxoSmithKline or the Anglo-Swiss giant Glencore, had demanded changes to the board of Richemont.

These financial players take minority stakes in the capital of publicly traded companies that are said to be poorly managed in order to flex their strategy in hopes of realizing significant capital gains.

A constitutional revision

Among Blubell Capital’s demands, he had requested that Francesco Trapani, former boss of the Italian jeweler Bulgari, be elected as representative of the holders of type A shares. In his convocation, Richemont proposed that Wendy Luhabe, who has been a director since 2020, to elect these types of shareholders as representatives.

The group, which generates half of its sales from jewelry but is also active in watchmaking, fashion and accessories with brands such as Chloé and Montblanc pens, also recommended rejecting the activist’s other proposals.

In particular, Bluebell had called for its articles of association to be amended to increase the number of directors representing A-share holders to three, and regretted the fact that they are not represented on the board.

A former Bulgari on the board?

Richemont stocks fall into two categories. A shares are those listed on the stock exchange. The B shares are held by Compagnie Financière Rupert, which takes its name from the group’s founding family, who are known to have had tobacco fortunes in South Africa before diversifying into the luxury sector. These are not listed.

The activist fund had castigated the disparity between the A shares, which represent 90.1% of the economic shares in the company, and the B shares, which hold 50% of the voting rights with only 9.1% of the capital.

Bluebell had proposed the candidacy of Mr. Trapani, one of the founders of the Activist Fund, citing his experience in the jewelry field. Mr. Trapani, great-grandson of Bulgari’s founder, had also headed LVMH’s jewelry and watch division from 2011 to 2014, following the acquisition of that Italian house by the French luxury giant. He remained an advisor to Bernard Arnault until 2016.

He also sat on the board of directors of American jeweler Tiffany & Co from 2017 to 2019 before being acquired by LVMH, one of Richemont’s biggest competitors.

(With AFP)