MONTREAL (FNS) -- Pierre Lessard, chief executive officer of Metro here, succeeded last week in having shareholders elect his candidates for the company's board.
The move gave Lessard a victory in his two-month proxy war with some 200 dissident merchant-owners who wanted to install their own slate of directors.
Recognizing Lessard's contribution of turning struggling Metro around in his 10-year tenure, shareholders at Metro's Jan. 30 annual meeting here voted 62% in favor of management's slate of directors that also reduced the number of merchant-owner board directors to five from seven on the 15-member board.
The decision to reduce the number was to reflect more accurately the merchant-owners' 32% share of the company. The merchant-owners, or affiliated grocers, proposed their own slate of directors to ensure Metro remains under local ownership, following months of rumors the company was for sale.
Lessard told shareholders Metro wasn't for sale. Instead, he said the company has about $666 million on hand to make an acquisition which analysts believe will either be A&P Canada or Canada Safeway.
However, Lessard said the proxy fight, which interrupted the annual meeting for two and a half hours for a vote count, has hurt the short-term prospects of an acquisition, which will have to wait a few months.
After being passed over for the top job at Provigo in 1985, Lessard joined Metro in 1990 when the company had an annual loss of $6 million.
Since then, Quebec's largest grocer has enjoyed 40 consecutive profitable quarters, including a 17% increase in earnings in fiscal 2000.
The trend continued for the first quarter of 2001, ended Dec. 23, with earnings increasing 20% to $16.4 million or 31 cents a share, and sales rising 5.5% to $746 million.
Lessard said Metro plans to spend over $200 million in capital improvements over the next three years.
