BUSINESSWEEK ONLINE : APRIL 24, 2000 ISSUE
INTERNATIONAL BUSINESS The Raiders Are Coming! The Raiders Are Coming! U.S. veterans of takeover wars see rich targets in Europe Strolling down the Champs-Elysees one day early last year, Guy Wyser-Pratte noticed a shoe store owned by French retailer Groupe Andre. Nearby shops were thronged with customers, but there wasn't a single shopper in the Andre store, which sits on some of Paris' priciest real estate. ''I said to myself: 'This place needs a new approach,''' the New York-based arbitrageur recalls. And so, Wyser-Pratte bought a 9% stake in Groupe Andre, then orchestrated a shareholder rebellion that led on Apr. 5 to the ouster of the company's top management and board of directors. Look out, Corporate Europe. Raiders such as Wyser-Pratte, a veteran of U.S. takeover wars, are now knocking on the doors of European boardrooms. Taking stakes in poorly performing companies, they are challenging a culture that often puts friendship and family ties ahead of shareholder value. Their blunt message: Shape up, or we'll ship you out. ''Unfortunately, it's still endemic to European culture that people are afraid to stand up to the Establishment,'' Wyser-Pratte says. ''But people like me aren't.'' CASH HOARD. Indeed not. The French-born Wyser-Pratte, 53, is setting up an investment fund, Global Governance Partners, targeting European companies that he sees as undervalued. He hopes to raise $200 million. Besides Groupe Andre, he has tangled with several other companies, including French toolmaker Facom, which he pressured to sell some assets and cut debt after he took a 7% stake three years ago. Now, he and Asher B. Edelman, another veteran U.S. arbitrageur, are attacking France's venerable Societe du Louvre, which is run by the Taittinger family of champagne fame and includes holdings such as Baccarat crystal and Paris' luxurious Hotel Crillon. The two, who say they and their allies control 35% of Societe du Louvre, will argue on May 2 in a Paris court that a network of cross-shareholdings by the Taittinger family illegally undercuts minority shareholders' rights. ''This company is run as a family fiefdom,'' says Edelman. The Taittingers deny it. ''Our company and our family are serene,'' says Anne-Claire Taittinger, chief executive of Societe du Louvre. She accuses Edelman of using ''disinformation'' in an unsuccessful campaign to pit family members against each other. Edelman wants to split Societe du Louvre into three companies, which he says would more than double its $682 million market cap. Edelman and Wyser-Pratte see more rich targets among the many poorly managed smaller companies in Europe. Groupe Andre is a classic example. Its ousted chairman, Jean-Louis Descours, is 83 and had run the company for 36 years. Groupe Andre had $1.6 billion in sales last year, but profits were only $44 million. In recent months its share price has badly lagged behind France's CAC 40 stock index. ''In every town and village in France, they have the best location,'' Wyser-Pratte says. ''You can bet the Gap and Banana Republic would know how to make money in those stores.'' Other investors agreed. Although he says they were not formally working together, Wyser-Pratte was aided in the assault by NR Atticus, a London-based investment fund. It's run by Nathaniel Rothschild, a 28-year-old scion of the Rothschild banking family, and Timothy Barakett, 35, a New York investor. Barakett has pushed for restructuring at U.S. companies such as Unique Casual Restaurants Inc., owner of Fuddruckers Inc. The raiders' aggressive style has rattled decorous Europeans. Edelman is a notorious takeover artist who stalked such prey as Fruehauf Corp. and Lucky Stores Inc. in the 1980s. Wyser-Pratte, an ex-Marine who used to run Prudential Bache Securities' arbitrage department, says he has earned returns averaging 120% a year by launching offensives against 33 companies since 1991. The onslaught is sure to continue. Edelman is organizing a shareholders' rebellion at Baumgartner Papiers, a Swiss paper company, where he has taken a 30% stake and is pressing for new management. And Wyser-Pratte says he has a long list of companies he'd like to go after. ''There are so many that need a good, clean sweep,'' he says. Sounds like warfare in the boardrooms of Europe is only getting started. By Carol Matlack in Paris _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS The Raiders Are Coming! The Raiders Are Coming! TABLE: Who's Prowling Europe INTERACT E-Mail to Business Week Online

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