French Yellow Pages (SOLOCAL) individual shareholders put company under pressure

 In a unique case of general investors mobilisation the individual holders of Solocal Group, a specialist of local advertising, recovering from the KKR led LBO on the  telephone register business of France Telecom, will possibly force the company management but also the French Government and the AMF to act and better protect the minority holders.


Some 602  individual holders of Solocal Group (formerly the Yellow Pages)  have regrouped to face an explainable drop in the share price  which reached 3.50 euros in late February at the bottom of a descent into hell that lasts for years. This trend followed the leveraged acquisition of the France Telecom subsidiary by financiers clustered around the famous American fund KKR for three billion euros. Proxinvest had then bought in 2005 at a price of € 18.82 before regrouping of the shares, i.e.teh equivalent of  € 564 a share which  traded at € 3.60 at the end of February 2016!

These investors secured by  the recurrent nature of Yellow Pages business, full of contempt for small investors had transferred to the company the huge debt they had contracted at the expense of the company listed minority.  But the  unhealthy ambitions later faced with the difficulties of this group to cope with the Internet competition: finally all the shareholders took the loss resulting from poor management values ??and predatory interests backed by banks. These LBO techniques encouraged by some major banks do much damage and have never seriously reined by regulators.

More recently, helped by strong national position, the company renamed Solocal Group, was able to restore its strategic model, to conquer his place in the internet as great player in local advertising: ultimately in 2014 at  the price of a capital increase at the adjusted price of 15 euros, the company found a positive cash flow and became even profitable. The 2017 maturity of the  € 1.2 billion remaining debtwas no longer a problem, but this deadline probably offered a temptation for some raptors …

Actually the contempt of shareholders was at work at Solocal in 2014 wher poor financial communication dropped deaply the share price in 2015.
A first gruop of 300 holders led by former Chief Euris and EEM CEO , Baudoin de Pimodan, so just wrote a following letter to the Board of Solocal Group, its Chairman Robert Metz and its Director General Jean- Pierre Remy.

Proxinvest has likewise wrote to President Robert de Metz to question the Solocal communication “the cryptic mention of debt negotiations coupled with results that have been damaged by a social risk provisioning that appeared excessive, have discredited  the stock and the company management.”

Once again the AMF is challenged on its treatment of misleading statements by companies and its general lax attitude facing sharehodlers orgnanised  dilution.

Unless the company changes is attitude and better defend sharehodlers with a serious commitment not to open the capital under the 15 euros thershold there will be a lot of action at the AGM of Solocal group.


Paris, 11 March 2016