Vivendi to acquire Amber Capital's Lagardère stake, paving way for takeover bid

The latest twist in the long-running boardroom battle over the Lagardère group means that media conglomerate Vivendi will control the two largest French publishers unless or until the regulatory authorities order it to shed some of its newly acquired assets.

At the moment Lagardère owns market leader Hachette Livre, and Vivendi owns Editis, the runner-up. However Vivendi announced in a press release on Wednesday evening (15th September), just after the Euronext stock market in Paris closed at 5.30 p.m. local time, that it had accepted Amber Capital’s offer to sell it the 17.9% stake the UK investment fund held in Lagardère: 25,305,448 shares, at €24.10 each. In August last year, the two shareholders signed a pact giving them first option to buy each other’s stake.

The latest deal should be completed by 15th December next year and would bring Vivendi’s share in Lagardère to 45.1%. By law, this would oblige Vivendi to launch a takeover bid for the rest of the capital.

Lagardère said in a statement last night that it was “delighted” with the plan. It showed Vivendi’s “confidence” in the group’s strategy, and confirmed that Lagardère would not be broken up, as had been rumoured.

The move comes two weeks after Bernard Arnault, LVMH chief and France’s wealthiest individual, said he was pulling out of Lagardère chief Arnaud’s personal holding company. That was 16 months after Arnault had come to the rescue to help Arnaud ward off approaches from Amber Capital and Vivendi.

Yesterday’s announcement comes as “no surprise”, says Jean-Clémenet Texier, president of the Compagnie Financière de Communication. Amber Capital needed to take the capital gain on the investment it had held in Lagardère for some time, he told The Bookseller. Contrary to his usual practice, Vivendi chief Vincent Bolloré will have to launch a takeover bid. “Now it is up to the regulatory authorities to set their conditions for the publishing and distribution sectors,” Texier added.

Meanwhile, the French financial prosecutor raided Lagardère’s head office on 14th September, according to media reports. This was part of a judicial enquiry opened last April after Amber accused the group of misusing company assets, buying votes, publishing inaccurate accounts and issuing false or misleading information. In July, Lagardère denied any wrongdoing following the newspaper Le Monde’s report on the inquiry.