FRANCE. Lagardère Group is set to undergo a restructure that would see Managing Partner Arnaud Lagardère (right) maintain management control but would allow other leading shareholders an enhanced role in decision making.
Arnaud Lagardère has proposed the conversion of the company from a partnership limited by shares to a joint-stock company. The proposal has been “positively received” by the group’s Supervisory Board and will be put to shareholders on 30 June. Lagardère is the parent company of Lagardère Travel Retail.
The move comes against the backdrop of continuing pressure from key shareholders Vivendi (which owns 27% of Lagardère shares) and Amber Capital (20%) for change to the board and decision making structures.
According to reports in the Financial Times and Reuters, the move means that Arnaud Lagardère would relinquish the ‘commandite’ corporate structure of governance established by his father in 1992, which has given him veto power over many decisions despite only holding 7.26% of shares.
A statement by the group today said that “the main investors in Lagardère SCA have agreed to vote in favour of the proposal” and that Lagardère and Amber Capital have agreed to terminate their legal disputes. As reported, last year Bernard Arnault, Chairman and CEO of LVMH Moët Hennessy Louis Vuitton, acquired around 25% of Lagardère Capital & Management (LC&M), the holding company of Arnaud Lagardère. The move was seen at the time as a defensive measure against corporate attacks by Lagardère’s other major shareholders.
Under the new proposals, a new governance structure will be established, allowing representation of the main shareholders on the Board of Directors. Arnaud Lagardère would be appointed Chairman and Chief Executive Officer, with Pierre Leroy as Deputy Chief Executive Officer, with added focus on operational excellence and cash generation.
The move would “reaffirm the integrity of the group, focused on its two pillars, Lagardère Publishing and Lagardère Travel Retail, together with its other activities,” said the statement.
As consideration for relinquishing their rights, the General Partners would be allocated ten million new shares.
The company stated: “The proposed conversion would represent an important milestone in the group’s history, built upon leadership in its different businesses and highly-committed teams.”
