Many gray areas on the future of Lagardère between Bolloré and Arnault
By Gilles Fontaine on 04.25.2021 at 3:50 p.m.
An agreement on the end of the sponsorship does not solve everything. Many questions remain about the intentions of the protagonists and the future of the Lagardère group.
Aranud Lagardère is on the way to winning his final battle: to come out on top of the serious governance crisis that has been shaking up the group that bears his name for more than a year. And seriously mortgage his personal future. A meeting of the Lagardère group's supervisory board should approve, on Monday April 26, the end of the Lagardère Capital & Management (LC&M) sponsorship which allowed Jean-Luc Lagardère's son to continue to lock in control of the company with only 7 , 3% of the capital. The operation was demanded by two powerful shareholders: the British fund Amber, which has been in the capital for several years and which now holds 20%. As well as the Vivendi group, the main shareholder with 26% of the shares, and of which the main shareholder, Vincent Bolloré does not hide his interest in a large part of the empire: Hachette Livre, world number three in publishing and media activity (Europe 1, the Sunday Journal, Paris-Match, etc.). In return, according to various sources, Arnaud Lagardère would obtain several important guarantees: the payment of 10 million shares which, over the last three months, would be valued between 220 and 240 million euros; the position of CEO of the group until 2026; and the promise that the group will not be dismantled.
"Father's friend"
Lawyers for the main parties involved are working hard to reach a final agreement by the time the council is held. But the planned end of the sponsorship does not solve everything. On the contrary, many shadows remain. Starting with the position of the boss of the LVMH group, Bernard Arnault. "Friend of the father", the latter came to the aid of the son last summer to counter the Amber Fund offensive and the hidden intentions of Vincent Bolloré. But above all to prevent Arnaud Lagardère from losing everything in the event of personal bankruptcy. By injecting nearly 100 million euros for 27% of the LC&M sponsorship, the businessman had indeed enabled Arnaud Lagardère to cope with his significant personal debt: around 165 million euros contracted with Crédit Agricole . Bernard Arnault also holds 7.5% of the capital of the Lagardère group. And he might not find his advantage in this peace treaty.
"Bernard Arnault never loses financially", comments a good connoisseur of the file. But he paid dearly for his entry into LC&M and it will be difficult for him to realize a capital gain on the end of the sponsorship. Treated in the same way as Arnaud Lagardère, he would recover nearly 3.7 million shares valued at around 85 million euros. More or less what he had invested last year, when the share was worth less than 14 euros, against almost 23 now. Does he wish to reinforce the capital of Lagardère and bide his time? Many especially lend him the intention of wanting to get their hands on the group’s press titles, starting with the Sunday Journal. Not sure that this deal is a priority at the moment. But the LVMH boss is unlikely to refuse to end the sponsorship. "He won't be the bad player, believes one of the protagonists. And if this ends badly for him, revenge is a dish to be eaten cold ..."
Dismantling of the media center
However, Bernard Arnault could obtain satisfaction in the context of a dismantling of the media center. Arnaud Lagardère has repeatedly indicated that activity is no longer at the heart of the group's priorities, now refocused on its two divisions: travel retail and publishing. And Vincent Bolloré has clearly indicated that the Europe 1 station would be very complementary with its CNews television channel.
Beyond the uncertainty over the fate of the media hub, it is the very integrity of the group that raises questions. Having become a shareholder like any other in a standardized company, Arnaud Lagardère will not have the same power in the context of a shareholder restructuring. The Amber fund and the Qatar sovereign wealth fund, still present at 15%, will probably want to withdraw. How will the next round of table be put together and how will the new balance of power be built? What agreement could guarantee the long-term integrity of a group whose two main activities do not generate any synergy? And what company would guarantee a man his chair as CEO for the next five years?
These are all questions that the various protagonists of the Lagardère dossier must reflect on. The end of the sponsorship offers them endless possibilities. The only certainty: the end of Lagardère's empire is near.