Lagardere Shares Tumble After Vivendi Acquires 10.6% Stake
April 22 2020 - 5:33AM
Dow Jones News
By Mauro Orru
Lagardere SCA's shares fell Wednesday after Vivendi SA said it
bought a 10.6% stake in the French media company.
At 0951 GMT, Lagardere shares traded 5% lower at EUR16.44.
Vivendi said Tuesday the investment reflected its confidence in
future prospects for Lagardere, which it said is "experiencing
difficult times" at the moment.
Analysts at U.S. bank Citi said Vivendi's statement implied
disruption from the coronavirus pandemic is harming Lagardere's
travel-retail business "particularly badly."
Vivendi's investment comes after press reports suggesting that
Lagardere CEO Arnaud Lagardere had been seeking help from French
industrialists, such as Vincent Bollore, in a standoff with
activist fund Amber Capital, Citi analysts said. Bollore SE has a
stake in Vivendi
Thomas Coudry, analyst at European investment bank Bryan
Garnier, also pointed to press reports suggesting that both Vincent
Bollore and Marc Ladreit de Lacharriere were building stakes in
Lagadere to assist Mr. Lagardere.
Amber Capital has in the past few months been ramping up its
stake in Lagardere, in which it currently owns more than 18% of its
share capital and 14% of voting rights.
Lagardere said late Monday that it was urging shareholders to
reject 15 resolutions submitted by Amber Capital to replace all
members of its supervisory board and appoint eight new independent
members.
"To the extent that the battle waged by the current management
team and supervisory board to resist activist-led changes is one
that the Bollore family wants to support, it feels to us
inappropriate to use Vivendi as a vehicle, especially when one
considers there are other investment vehicles presumably the family
could have used," Citi analysts said.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
April 22, 2020 06:18 ET (10:18 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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