TCI pushes Safran to keep outgoing chief in place
Activist hedge fund wants Philippe Petitcolin to steer the aerospace group through the industry’s crisis
TCI, the UK hedge fund run by Chris Hohn, is pushing French aerospace group Safran to keep its outgoing chief executive in place while it navigates the upheaval caused by the pandemic.
Philippe Petitcolin, who has led the €39bn group since 2015, is due to be succeeded by Olivier Andriès following a transition period that runs until the end of the year.
TCI, a $20bn fund that has agitated for boardroom change at companies from the London Stock Exchange to Wirecard, sent a letter to Safran’s board on Wednesday, according to multiple people familiar with the matter. The fund wants Mr Petitcolin to stay on as CEO, or at the very least, an adviser, the people said.
Safran is planning a board meeting on Thursday evening where the letter will be discussed, the people said.
“It just doesn’t make sense to change pilot during this kind of crisis,” said one person familiar with the matter.
Mr Petitcolin has warned that the aerospace sector faces a “new normal” of structurally lower demand, potentially 30 per cent below levels enjoyed before the pandemic, which has devastated the airline industry.
With job losses in the aerospace industry looming, the French government is planning to unveil a support package this month. Safran’s share price has tumbled by close to 28 per cent this year.
TCI and Safran declined to comment.
For the 67-year-old Mr Petitcolin to remain as chief executive, Safran would need to change its statutes which currently only allow for CEOs to stay in their position until the age of 68. The aerospace group has already amended its statutes once to allow Mr Petitcolin to stay beyond on the original limit of 65.
As it stands, Safran could extend Mr Petitcolin’s mandate until the group’s next annual general meeting, which is scheduled to take place in either May or June next year.
TCI owns 5.7 per cent of Safran, according to Reuters data. Its push to keep Mr Petitcolin as CEO is not its first intervention at Safran.
In 2017, the fund successfully forced Safran to revise a takeover for aircraft interiors maker Zodiac. TCI had waged a campaign to force Safran to drop the deal completely, saying that Safran is “massively overpaying” for the troubled Zodiac in return for “questionable synergies”.
As well Safran, TCI holds large stakes in Alphabet, Charter Communications and Microsoft.