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EFES NEWSLETTER - MARCH 2023
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Everyone
of La Redoute’s 1.000 employee shareholders will get
100.000 euro !
This
news is doing the rounds in France and beyond, as you
can see in our press review.
The story began in 2013 when La Redoute was on the verge
of bankruptcy. The employees took over and 1,000 of
them invested a few euro. Today they have turned the
company around and Galeries Lafayette is now offering
millions to buy it back.
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These
figures are spectacular and unheard of on our shores.
But they are common in Anglo-Saxon countries where employee
share ownership is widespread in SMEs, unlike in continental
Europe. That becomes evident when ESOP participants
retire or when there is an IPO.
It seems likely that employee ownership will become
popular also in European SMEs, in fact this process
has already started.
However, there is no lottery or magic in this. Employees
who also co-own their companies are more innovative,
work harder and are more motivated. Then there is the
control premium, what a buyer is ready to offer to obtain
control of a company. For Galeries Lafayette, that is
100 million for La Redoute.
Is employees giving up control of their company in exchange
for a big pile of cash a good idea? The future will
tell.
We still remember the case of good trade unionists who,
together with their colleagues, controlled 10% of a
medium-sized Irish bank. They were the majority shareholder.
They could not resist the temptation of the prize that
Royal Bank of Scotland paid them for their share. Unfortunately,
they soon realized that with 1% of RBS, they no longer
mattered. Don’t forget how badly that ended.
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Press
review
We
have a selection of 26 remarkable articles in 9 countries
in February 2023: Canada,
Germany, Spain, France, Luxembourg, Netherlands, Norway, UK,
USA.
Canada:
The Canadian Employee Ownership Coalition is calling on the
federal government to make Employee Ownership Trusts a reality
in its Budget 2023 as it is in the USA and in the UK.
Germany: 85% of employee share plans generate at least
a 50% return over ten years.
France: The 1,000 employee shareholders of La Redoute
will share 100 million euros.
Luxembourg: Is the jackpot for employee shareholders
of La Redoute possible in Luxembourg?
Netherlands: The STAK is for long the equivalent of
the Employee Ownership Trust in the Netherlands; however its
use for business transfers has been lost.
Norway: Annual employee share purchase plan for Veidekke.
Spain: New trouble for Mondragon as two industrial
co-ops leave the Group.
UK: Thanks to the Employee Ownership Trust scheme,
every day a new SME is transferred to employees. This month,
among others, the case of: Harper McDermott, Archway Veterinary
Centre, Warrant Group, Kudos Records, Livingston James, Warwick
Auctioneers, Connick Tree Care, TwoTwenty Staircases, Talk
Training, Sewell Estates, Hanson Buildings.
The great resources of European lobbying for stock options
in startups.
USA: How an ESOP works. A new model: Private equity
and employee ownership.
The full press review is available
on:
http://www.efesonline.org/PRESS
REVIEW/2023/February.htm
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A
political roadmap for employee ownership in Europe
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