French billionaires hold truce in battle over Lagardere media group – Sources

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© Reuters. The logo of the French media group Lagardere can be seen at the general meeting of the group in Paris

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By Sarah White and Gwénaëlle Barzic

PARIS (Reuters) – Two of France’s richest businessmen are on the verge of reaching an agreement with media and publishing company Lagardere that would take a break in their attempts to pluck its fortune for several years, three sources close to those mentioned on Sunday Discussions.

Vincent Bollore, Lagardere’s major shareholder through its Vivendi (OTC 🙂 group, and luxury goods tycoon Bernard Arnault, also a Lagardere investor, have been at the center of the dispute over the company and its influential media for months.

The saga pierced major political circles in France a year before the presidential election. Some in President Emmanuel Macron’s camp fear that Bollore could seize assets like Lagardere’s Europa-1 radio and build a powerful Ringflügel outlet that goes against his campaigning.

The three sources familiar with the talks said Bollore, LVMH chief Arnault and Lagardere’s CEO Arnaud Lagardere are signing a deal that would include a five-year deal not to dismantle the company.

The details of the agreement and shareholder alliances as well as the impact of some of Lagardere’s assets such as Europe 1 and the Journal du Dimanche (JDD) have not yet been finalized.

They warned that the deal had not yet been signed and that last minute talks could get out of hand.

Lagardere is due to hold a board meeting on Monday, the sources said.

Arnaud Lagardere, who runs the indebted company founded by his late father, would be willing to let go of an arcane “command structure” as part of the deal, the three sources added.

This listing gave him the power to veto many important decisions, even though he only held 7% of the shares, and had been a major obstacle to takeover attempts by the company.

ARNAUD ON THE HELMET

The “Kommandite” was the target of criticism from the hedge fund Amber Capital, which led an activist campaign against the management of Lagardere for its governance.

Vivendi holds 27% of Lagardere, ahead of Amber with 20% and Qatar’s sovereign wealth fund with 13%, while Bernard Arnault holds just under 8% and has also invested in Arnaud Lagardere’s personal holding company.

“This deal would help to clarify the governance problem. There used to be two layers, now there would be only one,” said one of the people who were close to the talks.

However, it is not yet clear how the pact can be cemented to avoid takeover bids on Lagardere, including Vivendi, and whether there will be exit clauses. Sources have previously said that Amber and the Qataris are interested in selling out at some point.

As part of the discussed deal, Bollore could be a big winner. Vivendi could get three seats on the Lagardere board, one of the sources said.

Arnaud Lagardere would run the company for five years, the three sources said. Les Echos newspaper reported on Saturday that its share could also be increased to 14%.

Bernard Arnault had been interested in tracking down the JDD newspaper or Paris Match magazine, sources previously told Reuters.

The ceasefire would accomplish at least one of the billionaire’s goals, which is to help Arnaud Lagardere keep his job at the helm and avoid a complete breakup of the group, another source familiar with the talks said.

Arnault’s investment has been profitable so far, this second source said.

Bernard Arnault was a close friend of the company’s founder, Jean-Luc Lagardere.

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