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Arnaud Lagardere, the CEO of Lagardere, attends the group’s shareholders meeting on May 3, 2018 in Paris, France. Charles Platiau/Reuters Reuters, PARIS, July 2 – After a restructure, the heir to France’s Lagardere group ended up with a smaller than promised stake, further reducing his clout after relinquishing veto powers that shielded the firm and its influential media holdings against takeovers. According to two people close to the subject and corporate declarations, Arnaud Lagardere effectively owns 11 percent of the group, not the 14 percent given on paper to his holding firm when a previous partnership structure was finally dismantled last week. With Paris Match magazine, a radio station, and a Sunday daily among its valuable assets, Lagardere’s (LAGA.PA) revamp has made it more exposed to a possible takeover that would transform France’s media landscape less than a year out from a presidential election. Chairman and Chief Executive Arnaud Lagardere’s votes in the boardroom are unaffected by the previously unreported lesser shareholding. However, it is again another indication of his weaker hand. Last year, Lagardere sought partners in the face of personal debts and an activist campaign, eventually bringing on board two of France’s wealthiest businessmen and dealmakers, media mogul Vincent Bollore and luxury goods magnate Bernard Arnault, who are now investors with board seats. “In the end, Arnaud Lagardere negotiated to preserve his status over the economic equation,” one individual familiar with the situation stated. While Arnaud Lagardere only owned 7% of the corporation at the time, that investment came with specific powers that allowed him to veto decisions. Unraveling that arrangement as new investors demanded greater power gave his holding company the authority to raise its shareholding to 14%, but corporate documents show that some of those shares are effectively owed to Bernard Arnault. Arnault, who already owns 7% of Lagardere, is entitled to at least another 3% as part of the firm’s conversion to a joint-stock company, according to the two sources, and might claim more shares if he wants to cash out. After becoming dissatisfied with how the company’s restructuring came out, the businessman, who heads luxury goods giant LVMH (LVMH.PA), made the Lagardere group acknowledge that claim in recent corporate filings, according to the people. Arnault’s Financiere Agache investment vehicle did not respond to a request for comment. With a 27 percent ownership and board level power, Bollore and his Vivendi group emerged as the primary winners of Lagardere’s reform. Vivendi was a strong contender to launch a full buyout, according to three investor and banking sources, especially if other interested parties surfaced, despite concerns in French President Emmanuel Macron’s administration. find out more Macron is concerned that Bollore, who is already bridging the gap between some of Lagardere’s channels, such as Europe 1 radio and his CNews TV station, will form a formidable conservative media conglomerate that will inundate the airwaves with right-wing ideas, according to Reuters sources. Bollore and Lagardere declined to respond through their spokespeople. Macron’s office could not be reached for comment right away, but he has previously declined to do so. A THREAT FROM VIVENDI? Last year, sources suggested Bollore was interested in Lagardere’s publishing assets, which included Hachette. However, Arnaud Lagardere has so far praised the new business structure, claiming that it will enable the firm remain intact and focus on its core travel retail and publishing activities. “Vivendi and Vincent Bollore are assets, not threats,” Lagardere said at a shareholder meeting on Wednesday. The 60-year-old was re-elected to the board of directors for another six-year term, another concession for giving up the partnership structure at the once-dominant industrial conglomerate created by his father. According to corporate papers, some of Arnaud Lagardere’s shares in the Lagardere business are also security for a loan he took out with Credit Agricole bank. According to a source close to Arnaud Lagardere, the 164 million euro debt was under control. It’s unclear how much money is owed. Credit Agricole did not respond to a request for comment. Sarah White and Gwenaelle Barzic contributed reporting, while Mathieu Rosemain contributed additional reporting. Kirsten Donovan edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

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