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Vivendi makes move towards takeover offer for Lagardère

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Lagardere Group updates

Vivendi has reached an settlement to purchase activist investor Amber Capital’s 17.9 per cent stake in French media and retail group Lagardère, paving the way in which for it to make a full takeover offer if regulators approve.

Vivendi was already the most important shareholder in Lagardère with a 29 per cent holding, and the take care of Amber will take its holding to 45 per cent, previous the edge requiring it to make a compulsory offer for the remainder of the corporate.

The announcement is the newest twist in a five-year battle for management of Lagardère, and it means chief government Arnaud Lagardère shall be powerless to cease the sale of the group his late father based and constructed right into a defence-to-media powerhouse.

The son and inheritor slimmed down the corporate, whose greatest companies at the moment are the Hachette guide writer and stores in transportation hubs resembling Relay newsagents.

Arnaud Lagardère solely not too long ago in April agreed to dissolve the distinctive société en commandite construction that has lengthy ensured his ironclad management over the group despite the fact that he solely owned a 7 per cent stake.

However when Lagardère was transformed into a standard société anonyme, it left the corporate susceptible to takeover in a means it by no means had been earlier than. Arnaud Lagardère agreed to the change after getting a further 7 per cent stake, board seats and a five-year contract as CEO.

The saga began in 2016 when Amber mounted an aggressive activist marketing campaign to problem what it stated was the group’s poor monetary efficiency and Arnaud Lagardere’s weak management. Amber sought to switch the board a number of occasions and failed, till final yr when it appeared on the verge of successful a vote on the shareholders’ assembly.

To defend himself, Arnaud Lagardère sought assist from highly effective traders, together with Vivendi, which is managed by billionaire Vincent Bolloré, which invested and backed the household scion within the vote.

Arnaud Lagardère’s eponymous firm stated it was ‘delighted with the funding challenge that Vivendi needs to hold out’ © AFP through Getty Photographs

As soon as Amber’s resolutions failed to pass the Might 2020 shareholders assembly although, the detente didn’t final lengthy. Vivendi saved shopping for extra shares, which spooked the goal’s CEO. He turned to LVMH founder Bernard Arnault, who got here the rescue by investing in Arnaud Lagardère’s private holding firm and later in Lagardère straight.

In response, Vivendi in August reached a surprise alliance with Amber, which gave it the precise of first refusal to purchase the fund’s stake in Lagardère when it wished to promote.

Final week, Amber instructed Vivendi it wished to promote and the 2 started negotiations.

Vivendi stated in a statement on Wednesday that it had agreed to pay Amber €24.10 per Lagardère share, or roughly €610m, conditional upon it securing regulatory approval from French authorities and the European Union.

Competitors regulators are prone to scrutinise the deal as a result of Vivendi already owns French guide writer Editis, which competes with Hachette, so some asset gross sales could be required.

If for some cause, Vivendi can’t full the acquisition of Amber’s stake by December 15, 2022 then it’s required to search out one other purchaser for Amber’s stake on the identical worth.

Lagardère stated in a statement that it was “delighted with the funding challenge that Vivendi needs to hold out” and promised that its board would weigh in on the proposed public offer later.

Requested what would occur to Arnaud Lagardère after any takeover, a Vivendi spokesman stated: “He has the complete help of Vivendi now and going ahead.”

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