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Groupe Arnault is taking 27% of Arnaud Lagardère’s personal holding company after the Lagardère Group announced on Monday 17 August that it had renewed Arnaud Lagardère’s appointment as CEO for four years.
The Board of Directors of Financière Agache, the family holding company of Bernard Arnault, CEO of French luxury goods giant LVMH, has approved the acquisition of a stake in Arnaud Lagardère’s personal holding company, the two parties announced in a press release on Wednesday.
“The Board of Directors of Financière Agache (a subsidiary of Groupe Arnault) met to approve the investment in Lagardère Capital & Management announced on May 25, 2020,” it said.
Bernard Arnault and Arnaud Lagardère have thus sealed their alliance, after Arnaud Lagardère had brought forward by seven months his term of office as Managing Director, which was initially due to end in March 2021, when his current term of office expired.
His current term of office has therefore been renewed for four years and will allow a reorganization of governance to be initiated.
This decision comes less than a week after the formation of an alliance between the group’s two largest shareholders, Vivendi and the investment fund Amber Capital, aimed at obtaining four seats on Lagardère’s board of directors and the convening of a general meeting at the end of the summer.
The aim was clearly to oust the executive before his reappointment.
On the business side, the Lagardère Group saw its half-year figures deteriorate sharply due to the health crisis caused by the Coronavirus pandemic.
Results plunged into the red in the first half of the year, notably due to a collapse of its Travel Retail business, which concerns distribution in transport locations (train stations and airports).
To mark the occasion, the group will set up a “management board” made up of the five members of the executive board as well as the two executives of Lagardère Publishing and Lagardère Travel Retail.
The group stressed in a press release that this choice is justified by “the need to stabilize the group’s governance in an unprecedented period“.
In addition, the management presented a “strategic roadmap” to deal with the crisis, which involves “adopting the concessive model to gain agility and flexibility” for Travel, and an offensive attitude on the publishing side, for which the group intends to take advantage of the “numerous consolidation opportunities in the short term“.
The “management board” appears to be a strengthening of the management, but above all a response to the agreement announced on August 11 by Vivendi and Amber Capital, which respectively hold 23.5% and 20% of Lagardère’s capital and wanted to take steps to have minority representation on the supervisory board, with three members for Amber Capital and one member for Vivendi.
Amber Capital has constantly reiterated its desire to “seek the appointment of one or more members to the supervisory board”, and to work for the transformation of Lagardère into a limited company, currently under the status of a limited partnership per share, he said.
This atypical status of the Lagardère group allows the boss and heir of the company Arnaud Lagardère (general partner) to retain control with only some 7% of the shares.
In return, he is indefinitely liable for the company’s debts on his own assets.
Read also > FINANCE: VINCENT BOLLORÉ AND BERNARD ARNAULT FIGHT OVER THE LAGARDÈRE GROUP
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