Proxinvest told Reuters that it was advising its clients to reject the $34bn deal, which goes to shareholders for approval on September 7.
The influential advisory firm sent a letter to fund managers saying that Alcatel would pay too much for Lucent, and that Alcatel’s own business was recovering, notably its fixed-line unit. The letter also pointed to Lucent’s profit warning in July.
What’s more, Proxinvest said it did not approve of some of the suggested changes to Alcatel’s corporate government and board. For example, it has been proposed that the chairman and board directors of the newly combined company could only be ousted if their removal had the backing of two thirds of the board. Proxinvest said this would protect directors and not investors.
Also, Alcatel’s current chief executive Serge Tchuruk, who would also take the helm of Alcatel Lucent, would likely continue to lead long after he turns 70, Proxinvest argued. As part the deal, the age limit of 70 for the combined company would apply only if more than one third of the board also is over 70.
