Lagardere Shares Tumble After Vivendi Acquires 10.6% Stake

   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 [e-mail]; @MauroOrru94

(END) Dow Jones Newswires

April 22, 2020 06:18 ET (10:18 GMT)

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