Lagardère investor Vivendi likely to become key influencer in potential M&A scenarios – sources

Lagardère shareholder Vivendi is likely to further increase its stake in the Paris-based media conglomerate and become a key player in any future M&A transactions involving its domestic peer, according to sources this news service spoke to.
 
Vivendi, which is led by media mogul Vincent Bolloré, increased its stake in Lagardère to 13.36% from 10.6%, according to a regulatory filing published earlier this month. Vivendi was instrumental in blocking resolutions filed by activist Amber Capital aimed at overhauling Lagardère's supervisory board.
 
Amber, which holds approximately 16.41% of Lagardère, was looking to dismantle the media group’s commandité management structure, which centralises power with managing partner, Arnaud Lagardère.
 
In its regulatory filing, Vivendi specified it does not intend to take full control of Lagardère, but that it reserved the right to continue buying more shares.
 
Vivendi’s commitment not to take full control of Lagardère is valid for six months, after which anything is possible, pointed out Colette Neuville, president of ADAM, a French association for minority shareholders.
 
It is possible that Bolloré, although friends with Arnaud, has been looking at Lagardère for a while, French local proxy advisor Proxinvest argued. His strategy going forward depends on whether he bought this stake as a business opportunity or out of friendship towards Arnaud. Either way, he certainly did not invest in Lagardère to lose money, Proxinvest added.
 
No change is expected in the short term, however, Neuville and a source familiar with the situation said. Any merger of Lagardère and Vivendi assets is unlikely while the commandité structure is in place at Lagardère, the source familiar said.
 
Overturning the commandité structure, under which shareholders are currently unable to remove the managing partner, would make sense, a banker following the company and Proxinvest argued.
 
Amber will most likely continue talking to all parties involved and keep all engagement behind closed doors, Proxinvest said. Public statements from Amber are highly unlikely from now on, Proxinvest added.
 
Amber declined to comment.
 
Other significant shareholders in Lagardère include the state-owned Qatar Investment Authority with approximately 13% and Lagardère Capital & Management, the holding of Arnaud Lagardère, which holds over 7%.
 
Potential M&A scenarios
 
Investing in Lagardère fits within Vivendi’s expansion strategy and Bolloré could be eyeing some Lagardère assets to combine them with existing divisions at Vivendi, a second source familiar, a banker following the situation and Proxinvest all agreed.
 
The most likely combination would be between the two companies’ publishing assets - Lagardère’s Hachette and Vivendi’s Editis, all three further agreed.
 
To view the full article, please email Kasia Koslowska.
 
by Claudia De Meulemeester, Amy-Jo Crowley and Giulia Lasagni