The Peugeot family wants to retake majority control of PSA/Peugeot Citroen, the head of the family told Automotive News Europe.
Owning more than 50 percent of capital would protect PSA from shortsighted management, said 69-year-old Pierre Peugeot, who heads the supervisory board.
'This is an industry where the gestation period of strategic projects is long,' he said. 'It's in the company's interest that the core shareholder group is reinforced to ensure its development.'
The founding Peugeot family's stake in PSA has steadily increased since 1999. The company has bought back shares and then canceled them, boosting the proportion of capital held by remaining shareholders.
At the end of 2001, the Peugeots owned 26.46 percent of the capital and 39.52 percent of voting rights, compared with 22.68 percent and 34.37 percent respectively at the end of 1998. PSA shareholders on May 15 agreed to repurchase 25 million shares, or nearly 10 percent of the capital, in the next 18 months.
The plan is good news for shareholders, said Christine Blondel, a senior researcher at the French business school INSEAD.
Blondel last year published a study which showed that family-led firms consistently outperform rivals on the French stock market.
She said growing stock market volatility, which increases vulnerability to raiders, is one reason the Peugeots want at least 50 percent control. A 33 percent stake only allows the family to block certain decisions, such as a capital increase.
Last year, corporate raider Vincent Bolloré bought a stake in Foncière, Financière et de Participations, or FFP, which is 80 percent-owned by the Peugeots and which holds most of the family's shares in PSA.
At the current pace of the buy-back, it will take at least 10 years for the family to control 50 percent of PSA. But analysts said the family could move more quickly through other means, such as increasing FFP's capital and investing the proceeds in PSA shares.