Vivendi advances towards a takeover offer for Lagardère

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Vivendi has reached an agreement to buy back activist investor Amber Capital’s 17.9% stake in French media and distribution group Lagardère, paving the way for a full takeover offer if regulators approve it.

Vivendi was already Lagardère’s largest shareholder with a 29% stake, and the agreement with Amber will increase its stake to 45%, beyond the threshold requiring it to make a mandatory offer for the rest of the company.

This announcement is the latest turning point in a five-year battle for control of Lagardère, and it means that managing director Arnaud Lagardère will be powerless to stop the sale of the group his late father founded and is building into a defense powerhouse in the United States. media.

The son and heir lightened the company, whose largest companies are now the publisher of Hachette books and outlets in transport poles such as the Relay newsagents.

Arnaud Lagardère only recently agreed, in April, to dissolve the distinctive Partnership structure which for a long time ensured its unfailing control over the group when it held only 7 percent.

But when Lagardère was converted to a normal sanonymous company, this made the company vulnerable to a takeover like it had never been before. Arnaud Lagardère accepted the change after securing an additional 7% stake, board seats and a five-year contract as CEO.

The saga began in 2016 when Amber launched an aggressive militant campaign to challenge what she said was the group’s poor financial performance and Arnaud Lagardère’s weak leadership. Amber has made several attempts to replace the board and failed, until last year when she appeared on the verge of winning a vote at the shareholders’ meeting.

To defend himself, Arnaud Lagardère asked for the help of powerful investors, including Vivendi, controlled by billionaire Vincent Bolloré, who invested and supported the family offspring during the vote.

Once Amber’s resolutions were not passed at the May 2020 shareholders’ meeting, the detente did not last long. Vivendi continued to buy additional shares, which scared the CEO of Target. He turned to the founder of LVMH, Bernard Arnault, who saved him by investing in Arnaud Lagardère’s personal holding and then directly in Lagardère.

In response, Vivendi entered into a surprise alliance with Amber in August, which gave it the right of first refusal to buy the fund’s stake in Lagardère when it wanted to sell.

Last week, Amber told Vivendi that she intended to sell, and the two began negotiations.

Vivendi said in a statement on Wednesday that it had agreed to pay Amber 24.10 euros per Lagardère share, or approximately 610 million euros, subject to obtaining regulatory approval from French authorities and the European Union. .

Competition regulators are likely to review the deal because Vivendi already owns French book publisher Editis, which competes with Hachette, so some asset sales may be required.

If, for some reason, Vivendi cannot complete the purchase of Amber’s stake by December 15, 2022, then it will have to find another buyer for Amber’s stake at the same price.

Lagardère declared himself “delighted with the investment project Vivendi wishes to carry out” and promised that its board of directors would vote on the proposed public offer at a later date.

Asked what would happen to Arnaud Lagardère after a possible takeover, a Vivendi spokesperson said: “He has Vivendi’s full support now and in the future.”