Vivendi paves way for Lagardere takeover, adding to media empire

By Sarah White and Gwénaëlle Barzic

PARIS (Reuters) -Vivendi said on Wednesday it was set to purchase another stake in Paris Match magazine owner Lagardere, paving the way for a full takeover which would extend the influence of its controlling shareholder, Vincent Bollore, over France’s media landscape.

Canal+ owner Vivendi , which already has 27% of Lagardere, said it had agreed to buy Amber Capital’s 17.9% holding, for 24.10 euros per share or around 610 million euros ($720.3 million).

It said it would later launch a full bid for Lagardere at the same price, once it has passed the 30% threshold requiring companies in France to make a takeover offer. That would value Lagardere at around 3.4 billion euros, compared to its 2.7 billion euros market capitalisation at Wednesday’s close.

If successful, the acquisition of Lagardere will mark the end of what was once one of France’s national industrial champions, which under its late founder used to have large stakes in companies like plane maker Airbus.

Heir and Chief Executive Arnaud Lagardere has sold off parts of the conglomerate bit by bit. Last year he brought in investors like Vivendi and luxury goods tycoon Bernard Arnault when he was trying to fend off an activist campaign by Amber.

As well as travel retail operations and a publishing business, which includes the Hachette label, it still has influential media assets which Bollore and Arnault have lusted after, sources close to the matter have said previously.

These include Paris Match, the Journal du Dimanche weekly newspaper and Europe 1 radio station, which has already built bridges with Bollore’s CNews TV channel, a network that has been topping ratings since taking a conservative turn.

Bollore’s media intentions in France have ruffled feathers in President Emmanuel Macron’s inner circle, sources have said, with some fearing his empire building could result in airwaves inundated in more right-wing views ahead of a 2022 presidential election.

The billionaire is also set to cash in as Vivendi prepares to list and spin-off Universal Music Group in September, raising questions about how he might use the money.

ANTITRUST

The Amber stake sale could take months to close and requires regulatory authorisations first, including from the European Union, but Vivendi said it would launch an offer at the same price once it had clinched the 45%. It is aiming for December 2022 at the latest.

Any subsequent takeover would also have to overcome potential antitrust problems in other areas, as Vivendi also has a publishing business, Editis.

But many of Lagardere’s shareholder would likely be ready to sell out, including the Qatar Investment Authority, which has 11.5%, people familiar with the matter have said.

LVMH boss Arnault, initially caught in a tug-of-war over Lagardere, has largely withdrawn from the battle. He now has an 11% stake in Lagardere and has cut financial ties with the firm’s heir and chief executive, Arnaud Lagardere, after initially investing in his holding company.

Lagardere said in a statement it was “delighted with the investment project that Vivendi wishes to carry out.”

Amber Capital had waged an activist campaign against Lagardere, largely succeeding in the governance overhaul it had sought after the firm this year scrapped an arcane partnership structure that served as a buttress to takeovers.

Lagardere’s offices in Paris were raided as part of a judicial investigation on Wednesday, in connection to the company’s previous disputes with shareholders such as Amber.

A source familiar with Vivendi’s management said the firm would continue to back Arnaud Lagardere as Lagardere’s CEO, and had informed him in advance of the move with Amber.

($1 = 0.8469 euro)

(Reporting by Gwenaelle Barzic and Sarah White in Paris, Additional reporting by Dominique Vidalon and Mathieu RosemainEditing by Alexander Smith, Matthew Lewis and David Gregorio)

By Sarah White and Gwénaëlle Barzic

PARIS (Reuters) -Vivendi said on Wednesday it was set to purchase another stake in Paris Match magazine owner Lagardere, paving the way for a full takeover which would extend the influence of its controlling shareholder, Vincent Bollore, over France’s media landscape.

Canal+ owner Vivendi , which already has 27% of Lagardere, said it had agreed to buy Amber Capital’s 17.9% holding, for 24.10 euros per share or around 610 million euros ($720.3 million).

It said it would later launch a full bid for Lagardere at the same price, once it has passed the 30% threshold requiring companies in France to make a takeover offer. That would value Lagardere at around 3.4 billion euros, compared to its 2.7 billion euros market capitalisation at Wednesday’s close.

If successful, the acquisition of Lagardere will mark the end of what was once one of France’s national industrial champions, which under its late founder used to have large stakes in companies like plane maker Airbus.

Heir and Chief Executive Arnaud Lagardere has sold off parts of the conglomerate bit by bit. Last year he brought in investors like Vivendi and luxury goods tycoon Bernard Arnault when he was trying to fend off an activist campaign by Amber.

As well as travel retail operations and a publishing business, which includes the Hachette label, it still has influential media assets which Bollore and Arnault have lusted after, sources close to the matter have said previously.

These include Paris Match, the Journal du Dimanche weekly newspaper and Europe 1 radio station, which has already built bridges with Bollore’s CNews TV channel, a network that has been topping ratings since taking a conservative turn.

Bollore’s media intentions in France have ruffled feathers in President Emmanuel Macron’s inner circle, sources have said, with some fearing his empire building could result in airwaves inundated in more right-wing views ahead of a 2022 presidential election.

The billionaire is also set to cash in as Vivendi prepares to list and spin-off Universal Music Group in September, raising questions about how he might use the money.

ANTITRUST

The Amber stake sale could take months to close and requires regulatory authorisations first, including from the European Union, but Vivendi said it would launch an offer at the same price once it had clinched the 45%. It is aiming for December 2022 at the latest.

Any subsequent takeover would also have to overcome potential antitrust problems in other areas, as Vivendi also has a publishing business, Editis.

But many of Lagardere’s shareholder would likely be ready to sell out, including the Qatar Investment Authority, which has 11.5%, people familiar with the matter have said.

LVMH boss Arnault, initially caught in a tug-of-war over Lagardere, has largely withdrawn from the battle. He now has an 11% stake in Lagardere and has cut financial ties with the firm’s heir and chief executive, Arnaud Lagardere, after initially investing in his holding company.

Lagardere said in a statement it was “delighted with the investment project that Vivendi wishes to carry out.”

Amber Capital had waged an activist campaign against Lagardere, largely succeeding in the governance overhaul it had sought after the firm this year scrapped an arcane partnership structure that served as a buttress to takeovers.

Lagardere’s offices in Paris were raided as part of a judicial investigation on Wednesday, in connection to the company’s previous disputes with shareholders such as Amber.

A source familiar with Vivendi’s management said the firm would continue to back Arnaud Lagardere as Lagardere’s CEO, and had informed him in advance of the move with Amber.

($1 = 0.8469 euro)

(Reporting by Gwenaelle Barzic and Sarah White in Paris, Additional reporting by Dominique Vidalon and Mathieu RosemainEditing by Alexander Smith, Matthew Lewis and David Gregorio)