Media

Lagardère fends off Amber Capital’s bid to replace board


Lagardère has fought off an effort by activist investor Amber Capital to unseat most of its board members and take control of the strategy at the underperforming French publishing and retail group.

Shareholders voted against the slate of eight candidates that Amber had proposed for the board at the group’s annual meeting on Tuesday, which was held online because of the coronavirus pandemic.

Instead they ratified the arrival of Nicolas Sarkozy, the former French president, and Guillaume Pepy, who used to head of France’s state-backed railway SNCF, as members.

The vote is the latest twist in a four-year battle between Amber and the company, which is controlled and run by chief executive Arnaud Lagardère, the 59-year-old son of the founder. A series of asset sales in the past decade have whittled down the group to two main businesses: book publisher Hachette and one that operates retail outlets in airports and transport stations.

Mr Lagardère welcomed the result. “Despite the media coverage having been occupied by opposition voices and lots of ‘fake news’ . . . this has been an incontestable vote in support of the group, its managers and board,” he said.

Lagardère’s shares were down 5.2 per cent to €14.41 in afternoon trading.

Amber is the group’s biggest shareholder with an 18 per cent stake, while Mr Lagardère owns 7.3 per cent. But the chief executive effectively has unassailable control of the company by virtue of its status as a société en commandite par actions. The structure, which is a hybrid between a partnership and a limited liability company, means that shareholders — or limited partners — cannot remove the general partner, in this case Mr Lagardère, as they could in a normal company. 

Amber has been critical of the structure, claiming it has led to poor corporate governance and allowed Mr Lagardère and his lieutenants to destroy shareholder value for years with few consequences. Shares in Lagardère have halved over the past three years.

Joseph Oughourlian, who leads the hedge fund, said he was encouraged by the results of the vote in which some of its proposed board members received as much as 47 per cent support. “We will continue our fight for better governance of Lagardère,” he said. “We will also be present in all the major debates to come, especially the one about the transformation of the commandite and creation of a new governance.”

It remains to be seen whether Mr Lagardère will keep the commandite in place now that he has prevailed over Amber. His private holding company has heavy debts that French media reports said have led him to consider abandoning it in exchange for compensation. However Pierre Leroy, secretary-general, said at the AGM that “no project of that nature, even exploratory, has ever been submitted or presented to the board”.

Investor activism is on the rise in France and other countries in continental Europe, which historically have had fewer campaigns than in the US or UK.

Two French billionaires who bought shares in Lagardère in recent weeks voted against Amber’s resolutions. Music and pay-TV group Vivendi, which is controlled by Vincent Bolloré, bought an 11 per cent stake, calling it a “long-term financial investment” in a company “experiencing difficult times at the moment”. Businessman Marc Ladreit de Lacharrière has also built a 3.5 per cent stake.



READ SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.