9/24/2020

French Billionaire Arnault Builds Up Lagardere Holding

Reuters (09/24/20) White, Sarah; Rosemain, Mathieu

LVMH (LVMUY) owner Bernard Arnault disclosed that he has accrued a direct stake in embattled publisher Lagardere (MMB), which is the center of a proxy battle between some of France's leading businessmen. The battle ensued when the company's managers sought aid in warding off a board shake-up attempt by Amber Capital. Lagardere has subsequently on-boarded new investors, including Vivendi (VIVHY) owner Vincent Bollore. But they clash with Lagardere's strategy, driving speculation that Bollore and Arnault will want to compete for some of its holdings. According to Arnault, his family holding company now controls more than 5% of Lagardere, and he is committed to the integrity of the group's main operations. He also has invested in the vehicle through which Lagardere CEO Arnaud Lagardere controls the firm, and said the two of them, with a collective 12.8% stake, would act in concert. Although Vivendi has recently built up a 23% stake in Lagardere and has partnered with Amber in a bid to gain seats, Arnaud Lagardere exerts significant influence over the company, as his share is held through a "commandite" scheme that empowers him to veto many decisions. A Vivendi spokesperson on Sept. 24 said the firm was "very happy" with Arnault becoming a direct Lagardere shareholder. Sources say Bollore initially was in Arnaud Lagardere's corner earlier this year in fighting off Amber, but the relationship soured after Arnault's involvement was revealed. Vivendi and Amber have now gone to court to attempt to induce an expedited shareholder meeting to change Lagardere's governance. Its supervisory board unexpectedly renewed Arnaud Lagardere's status as CEO months ahead of schedule in August. "It's a company that's managed only in the interest of one person and those close to him," said Amber's managing partner Joseph Oughourlian. Lagardere's attorneys Florian Bouaziz and Didier Malka refuted allegations of a lack of independence of the board, claiming Vivendi had initially voted for the renewal of the current one and against Amber. The court will rule on the shareholder meeting request on Oct. 14.

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