The Paris commercial court has rejected the demand by Vivendi SE and the UK's Amber Capital for Hachette Livre parent company Lagardère SCA to hold an early extraordinary shareholders meeting.
Vivendi said immediately it would lodge an appeal against the ruling because “it remains confident in the merits of its case”. Lagardère riposted a few hours later, saying that it welcomed the court’s decision, including its dismissal of allegations that the group’s supervisory board lacked independence.
This is the latest round in an ongoing tussle among the shareholders of Lagardère. If it wins its appeal, Vivendi and its ally, Amber Capital, would ask the meeting to give them seats on the supervisory board in order to have a bigger say in the group’s management.
Criticism of group chief Arnaud Lagardère’s performance has been mounting for some time and came to a head on 30th July, when the group reported a net loss of €481m for the first half of this year, against a net profit of €52m for the same period in 2019.
Vivendi and Amber, which formed an alliance in August to oppose Arnaud Lagardère, took their demand for an extraordinary shareholder meeting to court after the Lagardère group had dismissed the idea.
Vivendi announced on 1st October that it had increased its stake in Lagardère SCA to 26.7% and its voting rights to 20.2%. This made it the group’s leading shareholder, and increased Vivendi-Amber Capital’s combined stake from 43.5% to 45.2%. Lagardère owns Hachette Livre, the largest French publisher, and Vivendi owns Editis, the second largest.
In a declaration to the French financial regulator, Autorité des Marchés Financiers (AMF), Vivendi said it had no intention of taking over Lagardère, but planned to continue buying shares on the market and taking up its option to acquire those held by Amber. It acknowledged that if its stake reached 30%, it would legally have to launch a full takeover bid.
On 24th September, Bernard Arnault, chief of company LVMH, who is backing the group’s chief Arnaud Lagardère, announced he held more than 5% of the Lagardère group’s capital. This brought his and Lagardère’s combined stake to 12.77% and voting rights to 15.19%.
In August, Arnault’s holding company Groupe Arnault announced that its subsidiary Financière Agache would increase its share in the debt-ridden holding company Lagardère Capital & Management (renamed Lagardère Capital) to about 27%. Under a special arrangement, it controls the group despite holding few of the shares.
The Qatar Investment Authority, which holds nearly 13% of the Lagardère group’s capital through its subsidiary Qatar Holding, has also entered the fray on the side of Vivendi and Amber Capital. It said in a statement on 22nd September that it “acknowledges the request by two core shareholders of Lagardère SCA to obtain a (supervisory) board representation,” and added that it wants the same.
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