Due to the weakening of the heir’s control, Lagardère in France is at risk of being acquired

Authors: Sarah White and Gwénaëlle Barzic

Paris (Reuters)-The heirs of the French Lagardère Group ultimately acquired fewer shares than advertised after the reorganization. After he gave up his veto to protect the company and its influential media assets from acquisitions, his The influence is further reduced.

According to two sources close to the matter and the company’s statement, Anora Gardère actually holds 11% of the company’s shares, rather than the 14 that was allocated to its holding company when the partnership structure was finally dissolved before this week. %.

With less than a year before the French presidential election, Lagardère’s reforms have made it more vulnerable to acquisitions that may change the landscape of the French media. The Paris match magazine, a radio station and a Sunday newspaper are some of its valuables. assets.

The previously unreported smaller stake will not change the vote of chairman and chief executive Arnaud Lagardere on the board.

But this is another sign of weakness in his hands. Last year, under the pressure of personal debts and the rights protection movement, Lagardère sought allies and eventually brought France’s two wealthiest businessmen and dealmakers, media mogul Vincent Bollore (Vincent Bollore) and luxury goods billions. Rich man Bernard Arnault (Bernard Arnault) joined the board, and they are now investors with board seats.

“In the end, Anora Gardère negotiated to maintain his position, not an economic equation,” said a source close to the matter.

Although Arnaud Lagardere previously held only 7% of the company’s shares, the shares have special powers that allow him to prevent decision-making.

The company’s statement shows that as new investors push for greater influence and break this structure, giving his holding company the right to double its shares to 14%, but some of the shares are actually owed to Bernard Arnault. of.

Two sources confirmed that Arnault, who already holds 7% of the shares, is entitled to at least another 3% of Lagardere’s shares as part of the company’s conversion into a joint stock company. If he wants to redeem his shares, he can claim more shares.

The person familiar with the matter added that the businessman who runs the luxury goods giant LVMH insisted that the Lagardère Group mentioned this right in a recent company document because of dissatisfaction with the company’s restructuring.

A spokesperson for Arnault’s Financiere Agache investment vehicle declined to comment.

Bollore and his Vivendi (OTC:) group became the big winners of the Lagardère reform, with 27% of the shares and influence at the board level.

Three investors and banking sources said that Vivendi was the main competitor in launching a full-scale acquisition, especially when other interested parties emerged, despite the fact that French President Emmanuel Macron (Emmanuel Macron) Macron) The government is worried about this situation.

Sources previously told Reuters that Macron was worried that Pollor had already built bridges between some of Lagardère’s media, such as Europe’s Radio 1 and his CNews TV station. He might create a strong conservative media group with a right wing. Views drown the airwaves.

Spokespersons for Bollore and Lagardere declined to comment.

Macron’s office could not be contacted immediately, but previously declined to comment on the matter.

Vivendi threat?

Sources said last year that Bolloré also paid attention to Lagardère’s publishing assets, including Hachette.

So far, Arnaud Lagardere has welcomed the establishment of the new company, but said it will help keep the group intact and focus on developing its core travel retail and publishing activities.

“Vivendi and Vincent Bolloré are our assets, not threats,” Lagardère said at the shareholders meeting on Wednesday.

The 60-year-old child elected another six-year term on the board of directors during another six-year period, and another weighed in the partnership structure of the former industrial company founded by his father.

Company documents show that Arnaud Lagardere’s partial shares in the Lagardere Group are also collateral for his loan to Crédit Agricole (OTC:). A source close to Arnaud Lagardere said that the original debt of 164 million euros has been brought under control. It is not clear how many are unfinished. Credit Agricole declined to comment.