The fight for Orco has become an entertaining spectacle since chief executive Jean-François Ott launched a blog. In daily updates, Ott attacks activist shareholders who seek to have him and the board removed. The public attacks are witty, sharp and personal. They are simply unheard of in the small and polite world of real estate.
But then again, this is a battle for survival. Ott may feel that his position has become a bit stronger following two private share placings, raising €13.2m in total. But it is small fry compared with the company’s €1.97bn debt mountain.
It is too easy to dismiss the activist shareholders. Their stakes may be small but they can wield great power. In corporate history, there have been cases where the activist shareholders came out winning.
Dutch bank ABN Amro also thought itself too big and too important to deal with minority shareholders kicking up a fuss. It simply ignored their letters – but it was later sold and broken up.
Ott’s main criticism of the activist shareholders is that they don’t have experience, although he recently had to concede, again in his blog, that the opposition had found a respectable backer in Madame Anne-Marie de Chalambert, Generali’s property director in France.
“One credible person is not enough,” he writes. Fair enough, but it is a start and her name may attract more heavyweights.
Ott also accuses his adversaries of not having a magic solution to solve the debt problem. Ott may have a plan but it lacks any magic too. His solution is to pretend and extend. How long is that going to keep the dogs at bay?
