Groupe Arnault Reinforces Investment in Lagardère

PARIS — Bernard Arnault, it would seem, is not afraid of a good fight — or two. While the chairman and chief executive officer of LVMH Moët Hennessy Louis Vuitton has been making headlines for his luxury group’s battle with Tiffany & Co., another struggle is shaping up in France. In the latest twist of a saga involving well-known French businessmen and their personal loyalties, Arnault’s investment vehicle Groupe Arnault said Thursday it has reinforced is holdings in Lagardère SCA, investing directly in the embattled publishing and retail company.

The latest purchase comes on top of the acquisition of a 27 percent share in Lagardère Capital & Management, which holds a controlling stake in the conglomerate.

The luxury titan first revealed his involvement in Lagardère last May, noting it is intended to help out the conglomerate’s ceo Arnaud Lagardère, a family friend, who has been fending off activist investor Amber Capital.

Arnaud Lagardère and Groupe Arnault said they would act in concert with regards to the publishing and retail company, and together hold 12.77 percent of its capital and 15.19 percent of the voting rights.

“The conclusion of our investments in Lagardère Capital and Lagardère SCA strengthens our commitment alongside Arnaud Lagardère and underscores our attachment to the integrity and development of the Lagardère group based on its two priority areas, Lagardère Publishing and Lagardère Travel Retail,” Arnault said in a joint press release.

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Lagardère said he was “very happy and proud” of his partnership with the “very high-quality,” long-term partner. Lagardère Capital will continue to be controlled by Lagardère, who is chairman of the holding company. 

The company, which is active in book publishing under the Hachette umbrella, plus travel retail under the Relay, Aelia Duty Free and Vino Volo banners, has been adding to the news flow of French media outlets in recent months.

Amber Capital this summer struck a five-year shareholder pact with Vivendi — a media group controlled by French billionaire Vincent Bolloré — adding pressure on Lagardère and pushing for board representation as the two largest shareholders of the publishing group. Then came the early renewal of Lagardère’s mandate, for four years. This week, according to press reports, another major Lagardère shareholder, a Qatari fund, weighed in with the opinion that board representation for the largest shareholders is legitimate. A Paris court will rule on Oct. 14 on a request from Vivendi and Amber for an exceptional shareholder meeting, part of their bid to gain board representation, according to press reports.

In May, when revealing plans to invest in the media conglomerate, Arnault cited his friendship with founder Jean-Luc Lagardère, Arnaud Lagardère’s father, and said the two families would share long-term strategic interest in the company.

Bernard Arnault was on the supervisory board of Lagardère SCA from 2004 to 2012, and his son Antoine, ceo of Berluti and head of communication and image at LVMH, took a seat from 2012 to 2013. In turn, Arnaud Lagardère sat on the board of LVMH from 2003 to 2009.

Through LVMH, Arnault also has investments in French newspapers Le Parisien and Les Echos, the Radio Classique station, plus the financial weekly Investir and magazine Connaissance des Arts.

Lagardère’s first-half revenues came to 2.09 billion euros, down 38 percent, weighed down by a steep drop in travel retail due to the coronavirus crisis.

Over the past decade, the group has pared down its activities, particularly in magazine publishing, though it still holds the Elle brand license and owns the iconic celebrity title Paris Match and the influential French weekly newspaper Le Journal du Dimanche.

In 2011, Lagardère sold 102 international titles to Hearst Magazines, most notably Elle in 15 countries, including the U.S., Canada, Germany, Italy, Russia, China and Japan. It sold off its stake in Marie Claire in 2018.

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