French billionaires strike deal on new Lagardère structure – WWD
PARIS – French publishing and retail group Lagardère said on Wednesday it had reached a deal with shareholders to abandon the system of governance that had long given CEO Arnaud Lagardère full control of the company, defusing a battle between billionaires French Bernard Arnault and Vincent Bolloré for the control. of its media assets.
Arnaud Lagardère has agreed to dissolve the structure, known as a limited partnership with shares, and to replace it with a joint stock company. In exchange, he will receive 10 million new shares, or the equivalent of 7% of the company’s capital after their issue, and will be appointed chairman and chief executive officer for a six-year term.
“The proposed governance structure aims to ensure the continuity of management of the Lagardère group around the leadership of Arnaud Lagardère, and the representation of the main shareholders on the board of directors,” said Lagardère in a press release.
The operation avoids the prospect of dismantling the group, the parent company of the publishing houses grouped together under the Hachette Livre division; a travel retail division and media interests including Europe 1 radio, Le Journal du Dimanche and Paris Match magazine.
Lagardère fought efforts by activist investor Amber Capital and Vivendi, a media group controlled by Bolloré, to gain representation on the board. In order to strengthen his position, he hired Arnault, chairman and CEO of luxury conglomerate LVMH Moët Hennessy Louis Vuitton, to buy shares in Lagardère last year.
This strategy seemed to backfire on us, as Arnault and Bolloré clashed, Bolloré apparently interested in acquiring control of Hachette Livre and Europe 1, and Arnault seen circling JDD and Paris Match. LVMH already owns the newspapers Les Echos and Le Parisien.
Lagardère sold in 2019 most of its press portfolio to Czech Media Invest, including French Elle, Version Femina, Art & Décoration, Télé 7 Jours, France Dimanche, Ici Paris and Public.
“Any sale of publishing, travel retail or media assets representing a turnover exceeding a threshold fixed for each of these groups of activities, would require the authorization of the board of directors, by a majority of the three fifths of its members, ”said Lagardère.
Under the agreement, all major shareholders will be represented on the board. Arnaud Lagardère and Vivendi will each nominate three directors. Qatar Holding LLC and Amber Capital will each have the right to appoint a director and Financière Agache, the holding company controlled by Groupe Arnault, will propose an independent director.
Pierre Leroy will be appointed Deputy CEO “with additional emphasis on operational excellence and cash generation,” said Lagardère. The proposal has been approved by Lagardère’s supervisory board and will be submitted to shareholders at the annual general meeting on June 30.
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