PARIS (Reuters) – French publishing and media group Lagardere <LAGA.PA> on Tuesday fended off Amber Capital’s most daring attempt yet to shake up governance at the company, after shareholders rejected the activist investor’s call to replace the supervisory board.
Lagardere, locked in a stand-off with Amber over the past four years, had beefed up its defences with the arrival of new allies and investors, including French media magnate Vincent Bollore and his Vivendi <VIV.PA> group.
At a meeting held virtually due to the coronavirus crisis, shareholders voted against Amber proposals to oust seven members of the board and replace them with candidates which it argued would be more independent.
“This is a clear-cut vote in favour of management,” said Lagardere’s Chief Executive Arnaud Lagardere, at the helm since 2003, since taking over from his late father.
Lagardere shares closed down 5.9%.
Amber – which is not the first activist fund to try to shake up Lagardere, a conglomerate long under fire for its sprawling business mix and for underperforming on the stock market – had gone all out in its campaign.
It raised its stake to 18% in recent weeks, making it Lagardere’s top shareholder ahead of the Qatari Investment Authority.
“We will be present for all the debates to come,” Amber founder Joseph Oughourlian said in a statement following the vote, adding that other shareholders also wanted changes. Some of its proposals were backed by 40% of investors.
Amber’s salvo comes as activist investors, traditionally reluctant to take aim at French businesses, which often have family or state backing, try to up the ante in France, though with little success so far.
In March, U.S. fund Elliott ended its resistance to software company CapGemini’s $4.1 billion takeover of smaller rival Altran, after struggling to extract a higher offer price.
Amber had said it would agree to some of Lagardere’s proposals, including ratifying the appointment of former French President Nicolas Sarkozy – seen as a Lagardere ally – to the supervisory board.
But only one vote went against Lagardere, which wanted to renew a board mandate for Martine Chene, a former employee and union representative.
Lagardere still has challenges ahead, however – and Bollore to contend with. Vivendi, also present in media and publishing, is now Lagardere’s third biggest investor, leading to speculation over its intentions.
Lagardere, which owns Hachette, the publisher of Asterix comic books, also faces further pain from the coronavirus crisis, especially in its travel retail business. It expected revenue there to have fallen some 90% in April.
(Reporting by Sarah White and Gwenaelle Barzic; Editing by Mark Potter and David Evans)