When French media group Lagardère sells its 7.4% stake in Franco-German aircraft maker EADS, it will be “a personal victory” for Arnaud Lagardère,
a
Financial Times
report noted.
Lagardère’s father, Jean-Luc, helped create EADS, and the younger Lagardère was chairman of EADS before resigning in March. As chairman, he opposed a deal to merge EADS with Britain’s BAE Systems. Since the deal collapsed, EADS shares have risen 50%, which means Lagardère’s stake is now worth about 2.3 billion euros, the
FT
article said.
Mr. Lagardère, who owns about 10 per cent of the media group, will also gain personally, although this will help to offset the personal debt he took on when doubling his holding after his father’s death in 2003.
Lagardère’s share price has risen by about 30% in six months on the “expected windfall” from the sale of the EADS stake, according to the
FT
report. But Deutsche Bank analysts wonder about the group’s strategy, the article said. A Deutsche Bank research note expressed concern that the proceeds from the EADS sale “may be applied to a value-destructive M&A strategy,” the
FT
article said.
Arnaud Lagardère controls the group via a limited partnership, the report noted. Two years ago, an activist investor unsuccessfully tried to force a shakeup. The Qatar Investment Authority, which has a 13% stake, supports Lagardère, the
FT
article said.
Citi analyst Ruchi Malaiya told the
FT:
“People have realized they would be fighting a losing battle trying to force through changes because ultimately the only person who could appoint another chief executive is Arnaud Lagardère.”
(Source:
Financial Times,
April 9, 2013.)
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