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Arnaud Lagardère is approaching an agreement to abandon the distinctive legal structure that has long given him strict control over his eponymous French media group in an effort to neutralize the threats of two billionaires and a fund of activist coverage.
The French businessman is in talks to abandon the call sponsorships The system of governance, which his father established when he founded Lagardère in 1992, in exchange for 200 to 250 million euros, said people knew the subject. He sponsorships it allows him a veto right on most of the company’s problems despite owning only a 7% stake.
But Arnaud Lagardère has been backed by Vincent Bolloré, who has used Vivendi, the media company he controls, to build a 29% stake in Lagardère, as well as activist Amber Capital, who has long agitated per exchange and owns a 20% stake.
To try to defend them, he signed an agreement with billionaire Bernard Arnault a year ago, which turned the head of LVMH into a partner with a 25% stake in his personal holding company through which he controls the sponsorships. This also gave Arnaud Lagardère a much needed cash infusion to pay the staff debts.
He lifeline d’Arnault bought the heir for some time, but also intensified the battle for the company, as it caused Vivendi not only to unite with Amber, but also increase their stake to below the limit before they have launched a public offering.
In recent weeks, talks between the parties have accelerated to find a negotiated solution to the dispute, according to people familiar with the matter. The catalyst was the annual shareholders ’meeting that ended in June, as Arnaud Lagardère risked a new rebellion against him with a possible vote to replace the board, one of the people said.
The outlines of the agreement are that Arnaud Lagardère would receive the payment in exchange for accepting the dissolution of the joint stock company (SCA) and replace it with a conventional one joint stock company. Existing shareholders would be diluted. Lagardère would maintain an expanded stake, three seats on the board and a multi-year contract to be chief executive, the populists said.
Vivendi would hold three seats on the board of directors, while Amber, Arnault and former Qatar Investment Authority shareholder would each hold one seat.
People warned on Sunday that talks were continuing and could break down. A board meeting in Lagardère was expected on Monday and an announcement would soon follow.
If concluded, the deal would open a new phase for the company, where Arnaud Lagardère would have to fight with powerful shareholders on a new board of directors.
But he would be able to declare some sort of victory because his group would not be dismantled for now and influential media assets, such as the Journal du Dimanche and Paris Match magazine, remain under his control.
The Lagardère group was one of the industrial centers in France with aerospace, defense and automobile businesses, but has since shrunk through the sale of assets to focus on two main activities: the third world book publisher. Hatchet, and a travel retail business that operates relief kiosks and duty-free shops at train stations and airports.
Last year, the various factions had debated several scenarios, including one in which the group allegedly broke up with Vivendi taking on Hachette and LVMH the retail travel business. But Arnaud Lagardère long ago said he did not want to break the company and that these conversations did not come to fruition.
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