Loyez leaves Kingfisher board after criticising £3.2bn bid

The chief executive of Castorama has resigned from the board of Kingfisher just days after launching a stinging attack on the UK company which is attempting to buy out the remaining stake in the French DIY retailer.

Jean-Hugues Loyez said he had resigned in order to represent fairly the interests of a key group of minority shareholders which is opposing Kingfisher's £3.2bn bid.

Mr Loyez is one of five Castorama directors who disagree with the price and rationale of Kingfisher's plan to buy the 45 per cent of the Castorama equity it does not already own.

Mr Loyez, 53, launched an outspoken attack on Kingfisher at the French group's annual meeting last week. He accused the UK company of failing to understand the French market, under-investing in the Castorama brand and sending young consultants to advise experienced managers on how to run the business. It is understood he handed in his notice after the meeting last Thursday.

"Jean-Hugues felt that if he was going to defend minority shareholders' interests there would be a conflict of interest if he sat on the Kingfisher board," said a spokeswoman for the Commandites A, the French directors of Castorama who account for about 10 per cent of the shares. "This is a clear signal that his loyalty lies with Castorama.

Mr Loyez joined the Kingfisher board in 1998 when Kingfisher merged its B&Q DIY operation with Castorama. He was paid £464,000 last year, including a £264,000 bonus.

Kingfisher said: "Given that Jean-Hugues Loyez, like the other Commandites A, is opposing the offer he has a clear conflict of interest. He had, therefore, no choice but to resign from the Kingfisher board." It is not clear if he will receive a pay-off.

Schroder Salomon Smith Barney has been appointed as the independent bank that must rule on whether Kingfisher's €67 per share offer is fair. The ruling is expected in two to three weeks.

Kingfisher last week won a legal ruling which said the Castorama rebel shareholders could not appoint an intermediary to liaise between themselves and the bank.

A separate legal action is outstanding under which the Castorama directors say Kingfisher has not followed the correct process with its bid. A ruling on this was originally expected on 1 August but may now be delivered in the next few weeks.

As part of the Kingfisher break-up the group plans to demerge its electricals division and find a successor to its long-term chief executive, Sir Geoff Mulcahy. Kingfisher plans to seek a stock market flotation in Paris for its electricals arm, which includes Comet in the UK and Darty in France.