July 29, 2021

Lagardère more exposed to takeover risk after the reorganization

LAGARDÈRE MORE EXPOSED TO OPA RISK AFTER THE REORGANIZATION

by Sarah White and Gwénaëlle Barzic

PARIS (Reuters) – Arnaud Lagardère, heir to the group that bears his family’s name, has a lower stake than announced after the change in the capital structure, which deprives him of any veto over strategic decisions , in the face of the barely veiled desires of its major shareholders.

He actually only owns 11% of the conglomerate created by his father Jean-Luc, instead of the 14% displayed in the initial plan to reorganize the round table and abandon the management in limited partnership, validated by the shareholders at a meeting. general Wednesday, according to two sources familiar with the case and financial documents.

This reorganization, one year before the presidential election in France, therefore makes the group even more vulnerable to a possible takeover attempt which would change the balance in the French media since Lagardère owns, among other things, the radio Europe 1, the weekly Paris Match and the Sunday Journal.

Admittedly, a reduced participation does not undermine the power of Arnaud Lagardère, now Chairman and CEO, within the board of directors. But it marks a new stage in its gradual weakening, highlighted by the growing influence of two of France’s top fortunes, Vincent Bolloré and Bernard Arnault, key shareholders and represented on the board.

“In the end, Arnaud Lagardère negotiated his status more than the economic part,” said one of the sources familiar with the matter.

The project to transform the group into a public limited company, the result of a compromise reached in April between Arnaud Lagardère on the one hand, supported by the boss of LVMH, and on the other the activist fund Amber Capital, allied with Vivendi, the main asset of Vincent Bolloré, predicted that Arnaud Lagardère’s personal holding company could double its stake to hold 14% of the capital.

But part of the new shares which come back to him are in fact due to Bernard Arnault, show financial documents.

VIVENDI, A THREAT?

The two sources confirmed that Bernard Arnault, who already holds 7% of the group’s capital, could claim to receive around 3% more as part of the reorganization, or even more if he wished to leave Lagardère Capital, Arnaud’s holding company. Lagardère.

They specified that the boss of LVMH had insisted that this possibility appear in black and white in recent documents, after being dissatisfied with the turn of the restructuring project.

A spokesperson for Financière Agache, Bernard Arnault’s investment company, declined to comment on this information.

Vincent Bolloré and Vivendi, for their part, are the big winners of the operation approved on Wednesday, with 27% of the capital and the power to influence future strategic decisions.

Three sources within the shareholders and bankers concerned have said that Vivendi is a strong contender for a possible takeover bid, especially if other suitors emerge and despite fears that the political power will try to derail this scenario for prevent the formation of a conservative media hub around Europe 1 and the CNews news channel, several sources told Reuters.

Wednesday, during the general assembly, Arnaud Lagardère assured that “Vivendi and Vincent Bolloré are an asset for us and not a threat”.

Representatives of Bolloré and Lagardère refused to speak. The Elysee could not be reached immediately but had previously refused to speak on the subject.

A portion of the shares held by Arnaud Lagardère in the group also serve as a guarantee for a loan granted to him by Crédit Agricole. A source close to the CEO said that the loan, initially amounting to 164 million euros but the current amount of which is not known, was under control.

Crédit Agricole declined to comment.

(With the contribution of Mathieu Rosemain, French version Marc Angrand)

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