Activist investor Amber Capital set for showdown with French publishing giant Lagardere

On Tuesday, activist investor Amber Capital is set to face one of its biggest test in its high-stakes bid to shake up governance at media and publishing firm Lagardere. Shareholders are set to vote as they attempt to revamp the company’s supervisory board.

This stand-off comes midst a near four year battle, which saw some of the biggest names in French business and political circles being pulled into the fray as the company tries to fend off calls for a major overhaul.

Allies include media magnate Vincent Bollore and his Vivendi group, which has now snapped up Lagardere shares; former French President Nicolas Sarkozy was brought onto the firm’s supervisory board earlier this year.

If Amber were to score a victory, it would mark a feather on its cap following several frustrated attempts to take on the conglomerate which has long been seen as hindered by sprawling investments and criticized for its underperformance on the stock market.

It would mark its first real success, given that activist investors in France have rarely made incursions, until recently, given the abundance of family-owned businesses.

Amber, founded by Joseph Oughourlian, a former Societe Generale banker, has gradually increased its stake to 18%, making it Lagardere’s top shareholder ahead of the Qatari Investment Authority and Vivendi.

The activist investor has put forward the name of eight people, including that of former Italian Prime Minister Enrico Letta, to replace the bulk of Lagardere’s supervisory board; the fund has however agreed to ratify Sarkozy’s appointment along with Guillaume Pepy, the former head of France’s state-owned rail group SNCF.

Amber has billed the vote, which will be held virtually because of the coronavirus pandemic, as a referendum on Chief Executive Arnaud Lagardere’s performance, who has been at the helm since his father and ex-CEO Jean-Luc Lagardere’s passing in 2003.

It also aims to dismantle the so-called “commandite” structure which allows for different categories of shareholders and effectively provides Arnaud Lagardere effective control over the company while just holding a little more than 7% of the company’s shares.

Lagardere’s supervisory board however has the power to oppose the reappointment of Arnaud Lagardere as the commandite’s “manager” when his term expires in March 2021.

Categories: Creativity, Entrepreneurship, HR & Organization, Strategy

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