Billionaires Disrupt Media, Take Profits

Michael Hedges September 20, 2021 Follow on Twitter

Most media mergers and acquisitions are rather trance-like. Bland lawyers mingle with equally bland accountants to engage in an incomprehensible kabuki to carve up companies, usually without the knives, and dice up the money. A century ago this was so much more fun, at least made for the movies. Alas, we return to those glory days of high drama.

The saga of French publisher and broadcaster Lagardère SA took a further leap, several actually, into pulp fiction as billionaires fought for control. Lagardère SA publishes the very establishment weekly newspaper Journal du Dimanche (JDD) and equally vaunted magazine Paris Match. The company also owns publisher Hachette Livre, a book publisher of cultural dimension. For added spice there are several national radio channels involved as well as the omnipresent airport retailer Relay, which happens to distribute newspapers and magazines. A few years ago Lagardère was even larger.

Last week (September 16) French conglomerate Vivendi, principally owned by billionaire Vincent Bollore, acquired the stake in Lagardère SA owned by activist investor Amber Capital for €600 million. That 17.93% stake added to the 27% stake Vivendi already owned to tip into full takeover territory. Vivendi had been the top Lagardère shareholder, Amber Capital number two. M Bollore and Amber Capital principal Joseph Oughourlian have shared the desire to rewrite Lagardère corporate governance statutes, imperilling Arnaud Lagardère, chief executive and son of founder Jean-Luc Lagardère, an icon of the French establishment. That “transactional agreement” allowed M Lagardère to keep his job for six years.

A day earlier the Lagardère Paris headquarters was raided by the French financial police (PNF), noted Reuters (September 15). An investigation into “suspected misuse of corporate assets, inaccurate accounts and false or misleading information” had been opened last April on complaints by Amber Capital related to voting during 2018 Lagardère SA general assembly. Alas, that specific dispute between Lagardère SA and Amber Capital was resolved after amendments to the Lagardère SA corporate structure. The PNF investigation, noted Le Point (September 15), continues.

Opportunity for Vivendi and Amber Capital knocked loudly a year ago when LVMH principal Bernard Arnault, the top French billionaire, invested in Arnaud Lagardère’s personal holding company rather than the company itself. It was seen by French media watchers as a bailout for M Lagardère’s beleaguered financial circumstance rather than heightened interest in the publishing or broadcasting business. M Arnault was close to Jean-Luc Lagardère back in the old days. LVMH owns business publication Les Echos, regional outlet Le Parisien and national radio channel Radio Classique.

Controlling more than 30% of the Lagardère SA share capital requires, under French securities law, Vivendi to place a bid for total control. There are a few wrinkles. Vivendi owns pay and free-to-air TV operator Canal+, which includes the right-wing channel CNews. Lagardère SA subsidiary Lagardère News owns national radio channel Europe 1, founded by Jean-Luc Lagardère, which has been operating “informally” with CNews.

Certain to attract attention of French competition authorities is the book publishing business. Vivendi owns Editis, second largest book publisher in France. Lagardère SA owns Hachette Livre, the biggest French book publisher, also third biggest in the world. "It's a complete nightmare,” said an anonymous insider to Le Monde (September 16), “a guaranteed dismantling.” As a simple example, Editis publishes the Le Robert dictionaries and Hachette Livre publishes the Larousse series, together making 63% of French dictionary publishing. Competition sleuths at the European Commission will be looking.

There is other stirring within French media. Czech energy billionaire Daniel Kretinsky acquired a 5.1% stake in television broadcaster TF1, reported Reuters (September 14). Mr. Kretinsky already owns French magazines Marianne, Elle and Tele7 as well as a stake in newspaper Le Monde along with billionaires Matthieu Pigasse and Xavier Niel. He said the share acquisition was “not made in consultation with the Bouygues group,” which is currently pursuing either merger with or acquisition by TV operator M6, part of RTL Group. Mr. Kretinsky made an unsuccessful bid for M6, misunderstanding the desires of RTL Group for a “national champion” in French media.

See also...

• Hot Topics - Media Mergers and Acquisitions

• Hot Topics - Media in France

• Hot Topics - Vivendi/Canal+