Vivendi buys stake in Lagardère ahead of activist showdown
Two French billionaires build investments in media group
Vivendi has entered the fray in a looming battle between French media group Lagardère and an activist hedge fund by buying a 10.6 per cent stake in the family-controlled company.
Billionaire Vincent Bolloré’s conglomerate disclosed the investment on Tuesday ahead of an expected clash at Lagardère’s annual meeting on May 5.
Amber Capital, which is Lagardère’s biggest shareholder with an 18 per cent stake, has submitted resolutions to replace most of the board. It has argued that poor governance had allowed heir and managing partner Arnaud Lagardère to destroy shareholder value for years with little consequences.
Another French billionaire, Marc Ladreit de Lacharrière, has also invested in Lagardère in recent weeks, and is thought to hold a roughly 3.5 per cent stake, according to people familiar with the matter.
Vivendi was tight-lipped about its intentions. But Mr Bolloré has a long record of corporate raids such as at video games maker Ubisoft and construction giant Bouygues, and took control of Vivendi gradually with an initially modest stake.
In this case, Mr Bolloré may take a softer approach since Lagardère’s incoming chairman, former French President Nicolas Sarkozy, is a longtime ally.
“This acquisition is a long-term financial investment reflecting Vivendi’s confidence in the future prospects of the French group, which enjoys international leadership positions in its businesses and which, like many others, is experiencing difficult times at the moment,” said Vivendi in a statement.
Amber Capital founder Joseph Oughourlian said the arrival of the billionaires to Lagardère was a risk to the group, especially Vivendi.
“If Lagardère shareholders don’t want to be legged over by a competitor they should vote for our candidates,” he said. “Otherwise the dismantling of the group which started 10 years ago will reach a climax with a total dismemberment in the months or years to come.”
Vivendi owns a small French language publishing group called Editis, and Lagardère owns Hachette, the world’s third-biggest book publisher behind best-selling authors such as Donna Tartt and Michael Connelly.
Lagardère declined to comment.