Third Point builds stake in Ray-Ban maker EssilorLuxottica

NEW YORK: Third Point LLC, the US hedge fund that has pushed for changes at companies ranging from Nestle SA to Campbell Soup Co, has amassed a stake in Ray-Ban maker EssilorLuxottica SA, people familiar with the matter said.
Third Point, run by billionaire investor Daniel Loeb, is targeting EssilorLuxottica amid a power struggle inside the world’s largest lenses and glasses manufacturer, following its formation last year through a 48 billion euro ($53 billion) merger of France’s Essilor and Italy’s Luxottica.
Billed as a merger of equals, it degenerated into a battle over control between Luxottica’s founder Leonardo Del Vecchio and Essilor’s chief Hubert Sagnieres. The two sides announced a truce in May, but the company still faces uncertainty as it searches for a CEO that can deliver on the merger’s promised annual savings of 600 million euros.
Third Point has met with Del Vecchio, who is now EssilorLuxottica’s executive chairman and owns about a third of the company, according to two of the sources. Details of the meeting and on Third Point’s exact stake could not be learned.
Third Point has a track record of calling on operational improvements at companies where their stock could be buoyed by a different strategy, although is not clear what stance the New York-based hedge fund will adopt on how EssilorLuxottica should be run. Third Point is still in the process of buying EssilorLuxottica shares, one of the sources said.
The sources requested anonymity because Third Point’s investment in EssilorLuxottica is confidential. EssilorLuxottica, which has a market capitalisation of 57 billion euros, and Third Point declined to comment.
A representative for Delfin, Del Vecchio’s holding company, also declined to comment.
The Essilor and Luxottica camps were supposed to have equal weighting in the combined company’s leadership under an agreement which expires in 2021.
Tensions surfaced last November, when Del Vecchio appeared to tap his right-hand man and Luxottica Chief Executive Francesco Milleri as the next CEO. The dispute came to a head in March, when Del Vecchio’s Delfin said it would seek arbitration in the International Chamber of Commerce, prompting Essilor to ask a Paris court to nominate an outside mediator. — Reuters