A skirmish in war of France’s billionaires

Billionaires Bernard Arnault and Vincent Bollore made a spectacular entrance into the activist fight over Lagardere SA last year. Fast forward to today, and Bollore-controlled Vivendi SE is on the verge of taking over the storied media group behind Paris Match, while the London-based activist who started the saga looks poised for a tidy exit.
The puzzle is why the formidable Arnault — number three in Bloomberg’s Billionaire Index — appears to have achieved almost nothing. Tiny Lagardere punches above its weight for a 3.2 billion-euro ($3.8 billion) company. True, it’s no longer the conglomerate overseen by the late industrialist Jean-Luc Lagardere. But it possesses some crown-jewel media assets, including broadcaster Europe 1 and Sunday newspaper Le Journal Du Dimanche. Former French President Nicolas Sarkozy is on the board.
In 2016, Amber Capital UK LLP started buying the shares. Lagardere was a serial poor performer and the stock looked cheap. Years of rancor between the two sides followed, culminating in Amber launching a campaign to change the board early last year. The hedge fund argued that Lagardere’s antiquated “commandite” structure shielded scion and Managing Partner Arnaud Lagardere from accountability, keeping him well-remunerated even as shareholders suffered. While this unusual governance couldn’t be dissolved without Arnaud Lagardere’s agreement, Amber reckoned the firm’s supervisory board had carrots and sticks to persuade him to end it. So it asked shareholders to appoint a board that would initiate such talks.
Enter Bollore. At the time, Vivendi was hatching a plan to carve out its Universal Music Group record label. Amber’s assault on Lagardere created the chance that the beleaguered firm’s assets, or the whole company, could come up for sale — potentially attractive to Vivendi as its focus shifted to European media. So Vivendi bought a seat at the table by taking an 11% stake in late April.

—Bloomberg