Arnault Is Latest Billionaire to Invest in Lagardere
Arnault Is Latest Billionaire to Invest in France’s Lagardere
(Bloomberg) -- Bernard Arnault is the latest billionaire to invest in French media company Lagardere, backing the indebted heir of founder Jean-Luc Lagardere and taking a stake in the company, which also has interests in retail and publishing.
The mogul announced he agreed to acquire the equivalent of one-quarter of Lagardere Capital and Management, the holding of Arnaud Lagardere overseeing his stake within the eponymous group. Les Echos reported the acquisition was worth less than 100 million euros ($109 million). The stock rose as much as 15%.
Arnault, head of luxury giant LVMH, is the third French billionaire to take a stake in Lagardere after activist fund Amber Capital UK LLP demanded major changes at the conglomerate. Vincent Bollore and Marc Ladreit de Lacharriere recently injected funds into the embattled company.
Lagardere was a sprawling group spanning aerospace, automobiles and media until its controlling shareholder Jean-Luc Lagardere died in 2003. Arnaud, his son, jettisoned much of the business to shift away from manufacturing. He’s now focused on two units: book publishing houses, such as Hachette and Grasset, and travel retail, with stores in airports and train stations.
Lagardere controls some of France’s major news outlets including the Journal du Dimanche, radio station Europe1 and the iconic magazine Paris Match. This latest investment will allow Arnault to increase his outreach. The billionaire owns Radio Classique, Le Parisien and Les Echos, two national newspapers.
After the move, the company may be able to withstand pressure from Amber for a major revamp, Oddo analysts wrote.
Amber, which holds an 18% stake, has called for a change in governance and a more independent board. The company’s status as a general partnership gives Arnaud Lagardere broad sway even though he holds only 7.3% of the shares.
Amber Capital CEO’s Jospeh Oughourlian said that if the figure reported in Les Echos is correct, “that would mean a huge premium to the share price. And the combination of huge premium and the entrance of Bernard Arnault, the Rolls Royce of French capitalism, can only be read as positive for the Lagardere share price.” He spoke with Bloomberg on Monday.
On May 5, Ladreit and Bollore sided with the status quo at Lagardere following Amber’s two-year campaign to shake up governance.
Read more: Activist Loses Battle With Scion of Lagardere Business Empire
The Arnault acquisition announced Monday was completed at the same time as Bollore’s media company, Vivendi SA, increased its stake to more than 16% from 11%. Vivendi became last month the third-biggest shareholder after Amber and the Qatar Investment Authority.
The billionaires’ intentions with Lagardere’s future remain unclear.
Oddo said “the Arnault family could also be interested in some of Lagardere’s media assets.”
A spokesman for LVMH declined to comment beyond Monday’s statement.
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