Arnaud Lagardère is approaching a deal to relinquish the distinctive legal structure that has long granted him tight control over his eponymous French media and distribution group in a bid to neutralize threats posed by two billionaires and a militant hedge fund .
The French businessman is in talks to drop the so-called sponsorship governance system, set up by his father when Lagardère was created in 1992, in exchange for 200 to 250 million euros, according to sources familiar with the matter. the sponsorship allows him a veto over most business issues, even though he only has a 7 percent stake.
But Arnaud Lagardère was cornered by Vincent Bolloré, who used Vivendi, the media company he controls, to mount a 29% stake in Lagardère, as well as activist Amber Capital, who has long agitated for change and owns a 20 percent stake.
To try to repel them, he signed an agreement with billionaire Bernard Arnault a year ago, which made the boss of LVMH a partner holding 25% of the capital of his personal holding company through sponsorship. It also gave Arnaud Lagardère an indispensable infusion of money to repay the debts.
the safety rope d’Arnault bought the heir for a while, but also escalated the battle in the company as this prompted Vivendi not only to team up with Amber, but also to bring its participation to a little less than the limit before launching a public offer.
In recent weeks, talks between the parties have accelerated to find a negotiated solution to the disputes, people familiar with the matter said. The catalyst was the next annual shareholders meeting in June, as Arnaud Lagardère risked another rebellion against him with a potential vote to replace the board of directors, one of the people said.
The main lines of the agreement are that Arnaud Lagardère would receive payment in exchange for agreeing to dissolve the partnership Limited by shares (SCA) and replacing it with a anonimous society. Existing shareholders would be diluted. Lagardère would hold an expanded stake, three board seats and a multi-year contract to be chief executive, the people said.
Vivendi would occupy three seats on the board of directors, while Amber, Arnault and long-time shareholder Qatar Investment Authority would each have one seat.
People warned on Sunday that talks were continuing and could collapse. A board meeting in Lagardère was scheduled for Monday and an announcement would follow shortly.
If concluded, the agreement would open a new phase within the company where Arnaud Lagardère would still have to face powerful shareholders within a new board of directors.
But he could declare some sort of victory because his group would not be dismantled for the moment and the influential media, like the Journal du Dimanche and the magazine Paris Match, remain under his control.
The Lagardère group was once one of the French industrial powers with activities in aeronautics, defense and automotive, but has since been reduced by the sale of assets to focus on two main activities: the third publisher of books to the world. Hatchetand a travel retail business that operates Relay newsstands and duty-free shops at stations and airports.
Last year, the different factions discussed several scenarios including that of a breakup of the group with Vivendi taking over Hachette and LVMH in travel retail. But Arnaud Lagardère has long declared that he does not want to break up the company and these discussions have not succeeded.