By Sarah White and Gwénaëlle Barzic
PARIS, July 2 (Reuters) – The inheritor to France’s Lagardere group has ended up with a smaller than marketed stake after a restructuring, additional shrinking his sway after he gave up veto powers that protected the agency and its influential media belongings from takeovers.
Arnaud Lagardere successfully holds 11% of the conglomerate, not the 14% allotted on paper to his holding firm when a earlier partnership construction was lastly disbanded this week, in line with two sources near the matter and company statements.
Lagardere shares closed up 6% at 22.40 euros, accelerating their features after Reuters disclosed the stake dimension, merchants mentioned. Lagardere was the highest riser on the SBF 120 index .SBF120.
Lower than a yr out from a French presidential election, Lagardere’s LAGA.PA overhaul has made it extra weak to a attainable takeover that will change France’s media panorama, with Paris Match journal, a radio station and a Sunday newspaper amongst a few of its prized belongings.
The beforehand unreported smaller stake doesn’t alter the votes Chairman and Chief Govt Arnaud Lagardere will get within the boardroom.
However it’s one other signal of his weakened hand. Underneath stress from private money owed and an activist marketing campaign final yr, Lagardere sought allies, ultimately bringing on board two of France’s richest businessmen and dealmakers, media tycoon Vincent Bollore and luxurious items billionaire Bernard Arnault, who are actually traders with board seats.
“Ultimately, Arnaud Lagardere negotiated to maintain his standing greater than the financial equation,” one of many sources near the matter mentioned.
Whereas Arnaud Lagardere beforehand solely held 7% of the corporate, that stake had particular powers connected to it which allowed him to dam selections.
Unravelling that construction as the brand new traders pushed for extra affect gave his holding firm the precise to double its stake to 14%, however a few of these shares are successfully owed to Bernard Arnault, company statements present.
The 2 sources confirmed that Arnault, who already has 7%, is entitled to not less than one other 3% of Lagardere as a part of the agency’s conversion right into a joint-stock firm, and will declare extra shares ought to he wish to money out of the holding.
The businessman, who runs luxurious items large LVMH LVMH.PA, insisted the Lagardere group point out that entitlement in current company filings, the individuals added, after changing into disgruntled with how the corporate’s restructuring turned out.
A spokesperson for Arnault’s Financiere Agache funding car declined to remark.
Bollore and his Vivendi group emerged as the massive winners of Lagardere’s overhaul, with a 27% stake and affect at board stage.
Three investor and banking sources mentioned that Vivendi was a main contender to launch a full takeover, particularly if different events emerged, and regardless of fears in French President Emmanuel Macron’s administration about that state of affairs.
Macron has considerations that Bollore, who’s already constructing bridges between a few of Lagardere’s retailers like Europe 1 radio and his CNews TV station, may create a strong conservative media group that will inundate the airwaves with right-wing views, sources have beforehand informed Reuters.
Spokespeople for Bollore and Lagardere declined to remark.
Macron’s workplace couldn’t instantly be reached however has beforehand declined to touch upon the matter.
VIVENDI A THREAT?
Bollore has additionally had an eye fixed on Lagardere’s publishing belongings, which embrace Hachette, sources mentioned final yr.
Arnaud Lagardere has up to now welcomed the brand new firm set-up, nevertheless, saying it might assist hold the group intact and centred on growing its core journey retail and publishing actions.
“Vivendi and Vincent Bollore are belongings for us and never a menace,” Lagardere informed a shareholder assembly on Wednesday.
The 60-year-old was elected for an additional six-year time period on the board, one other trade-off for giving up the partnership construction on the once-mighty industrial agency based by his father.
A few of Arnaud Lagardere’s shares within the Lagardere group are additionally collateral for a mortgage he had taken out with Credit score Agricole financial institution, company filings present. A supply near Arnaud Lagardere mentioned that debt, initially 164 million euros, was beneath management. It’s not clear how a lot is excellent. Credit score Agricole declined to remark.
(Reporting by Sarah White and Gwenaelle Barzic, Further reporting by Mathieu Rosemain and Sudip Kar-Gupta in Paris and Julien Ponthus in London; Enhancing by Kirsten Donovan and Louise Heavens)
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