EssilorLuxottica's top investor seeks arbitration in governance spat

By Silvia Aloisi and Matthias Blamont

MILAN/PARIS (Reuters) - The top shareholder and executive chairman of EssilorLuxottica has filed an arbitration request to verify alleged violations of a merger agreement between the Italian and French groups, further escalating a spat over power sharing.

Essilor and Luxottica merged last October, creating the world's largest eyewear maker in a 54 billion euro ($61.73 billion) deal.

The two groups were supposed to have equal weighting in the combined company's leadership, but they now accuse each other of trying to gain the upper hand.

Delfin, the holding of Luxottica's founder Leonardo Del Vecchio, said in a statement the arbitration request was filed with the International Chamber of Commerce. It said it was seeking an injunction to ensure that the power-sharing agreement in the merger deal would be respected until it expires in 2021.

The request was due to a deadlock within EssilorLuxottica's board which was hampering the integration process and planned synergies, the statement added.

"Delfin thinks that the request to the International Chamber of Commerce is at present a necessary solution and the most appropriate move to preserve the investments of all shareholders," the statement said.

In an interview in French newspaper Le Figaro last week, Del Vecchio - who has a 31 percent voting stake in EssilorLuxottica - accused the vice chairman of the merged group, Hubert Sagnieres, of a power grab and said the Frenchman would only listen to himself.

As a result of the governance tensions, Del Vecchio said the 400-600 million euros of cost-savings that the merger was expected to yield had fallen behind schedule.

With the division of power unclear, analysts say tensions could undermine the integration process at the group, whose shares have falllen 11 percent since the start of the year.

Sagnieres had earlier on Wednesday sent a letter to Essilor staff seeking to ease concerns over governance.

In the letter, Sagnieres said that the search for a new CEO for EssilorLuxottica was a "priority" and that integration work was ongoing within the frame of 20 joint working groups with the support of U.S consulting firm McKinsey.

"We must dedicate our energy to integrating the two businesses under strong leadership and implementing the synergies that we have promised to the market," Sagnieres wrote on Wednesday.

"I will continue to ensure we accelerate operational efficiencies rather than becoming derailed by governance matters that often only reflect personal ambitions," Sagnieres added.

Sagnieres had previously accused Del Vecchio of a "de facto attempt to take control of the new group, without any premium offered to shareholders."

Tensions between the two groups have increased since last November, when Del Vecchio appeared to ear-mark indicate his right-hand man, Francesco Milleri, for the chief executive's role.

France and Italy have had previous disputes concerning companies while diplomatic rifts between Paris and Rome governments occurred this year.

(Reporting by Silvia Aloisi in Milan and Matthias Blamont in Paris; Editing by Tom Brown)