Paris-based media conglomerate Lagardere announced that it has gotten the support of French tycoon Vincent Bollore and Fimalac's Marc Ladreit de Lacharrière in its battle against its major investor Amber Capital. Following the news, Lagardere's share prices surged by close to 13 percent on Thursday.
Over the past four years, the activist hedge fund had been openly criticizing Lagardere's management and stock market performance. Lagardere had previously operated in a broad range of industries but has since been largely focusing on the media sector, which includes its publishing, travel, and media businesses.
Lagardere, which was initially established as Matra, Hachette & Lagardère in 1992, has four main business lines. These include its book and electronic publishing division, its store retail business, its newspaper, digital media and magazine publishing, and its sports and entertainment unit.
The feud between Lagardere and Amber Capital had reached a boiling point last month after the latter threatened to place its own members on the Lagardere's board. The activist investor, which has a 16.4 percent stake in Lagardere, plans to implement drastic changes within the company at its annual shareholder's meeting this coming May 5.
On Tuesday, Amber Capital had urged fellow stakeholders in Lagardere to support its proposal of replacing most of the company's supervisory board members. Amber Capital's request was reportedly heeded by some of the Lagardere's stakeholders, with some stating that the appointment of dissident nominees to the board "appears warranted." The activist investor has repeatedly stated that the company's current supervisory board are in "denial of reality" and are indifferent to the company's financial performance thus far.
French daily financial newspaper, Les Echos, reported this week that both Bollore and Ladreit de Lacharrière are considering investing in Lagardere to acquire voting rights during the upcoming General Meeting. The local publication unfortunately did not cite its sources.
If both parties are indeed planning on buying shares, the stakes would be smaller than the regulatory threshold of 5 percent, which means that they will not be required to notify French stock market authorities. Another report claims that the investments made by the two French tycoons are likely a "friendly gesture" of support for Lagardere.
After the trading day on Thursday, Lagardere's share prices closed at 17.11 euros, 12.6 percent up from the previous day's closing. The company's share prices have rebounded by more than 110 percent since it hit a historic low of 8.14 euros back on March 17. Even with Thursday's surge, the company's share prices are still down by around 11.9 percent year-to-date.
