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Lagardère agreement leaves long-term future of Hachette Livre open
The embattled Hachette Livre parent company Lagardère unveiled its expected peace agreement between shareholders this morning (Wednesday 28th April).
It rules out a break-up of the group in the immediate future, with a “reaffirmation of the integrity of the group, focused on its two pillars, Lagardère Publishing (Hachette Livre) and Lagardère Travel Retail.”
However it does not rule out a sale of assets at some future point. There were claims in the press last weekend that the agreement would preclude a break-up of the group for a period of five years, but this was not referenced in today's announcement. Instead, any publishing divestiture worth more than €50m would have to have the go-ahead from at least three-fifths of the shareholder votes, or seven of the 11 members of the incoming board of directors, Hachette Livre chief Pierre Leroy said in a webcast earlier today.
In addition to the group’s transformation into a joint-stock company, announced on Monday, the pact confirms most of last weekend’s press speculation. One exception is that chairman and c.e.o. Arnaud Lagardère will remain in his post for six years instead of five. Leroy, who succeeded Arnaud Nourry at Hachette Livre at the end of last month, will be his deputy.
The agreement ends all legal disputes, Leroy said in this morning's webcast. None of the shareholders will have control over the group or will be able to block strategic investment or budget decisions, he said.
Arnaud Lagardere will give up his special controlling status of the group, known as commandite, in exchange for 10 million shares, which are yet to be valued. This will double his shareholding through his holding company Lagardère Capital to 14%. Vivendi, owner of Editis, the second largest French publisher, will own 27% of the group, Amber Capital—one of Arnaud Lagardère’s leading critics—18%, the Qatar Investment Authority 12%, Financière Agache (holding company of LVMH boss Bernard Arnault) 7% and “others” 22%.
“I am still worried about the future of Hachette Livre,” commented Fran√ßoise Benhamou, cultural economics professor at Université Sorbonne Paris Nord. This is because “Vivendi both owns Editis and will have a big say in Lagardère’s book publishing activities,” she told The Bookseller.
Arnaud Lagardère said in the webcast that he had “no regrets”. The markets had been expecting the group’s change of statute, but the “conditions were not right” until now, he added.
The agreement will have to be authorised by the French financial regulator the AMF and approved by the Lagardère annual shareholders meeting on 30th June.
