UPDATE 2-Amber Capital looks to oust supervisory board of France’s Lagardere

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(Adds new Amber comments, share price)

PARIS, March 26 (Reuters) – Activist fund Amber Capital stepped up pressure on French multimedia conglomerate Lagardere on Thursday, saying it would seek to change the supervisory board and called for a review of its strategy.

Amber Capital, which holds about 16.4% of Lagardere’s share capital, said it would propose its own list of new supervisory board members at Lagardere’s annual shareholder meeting on May 5.

For more than four years, the fund has been criticizing the management and stock market performance of Lagardere, which has publishing, travel retail and media businesses.

“The vote for the supervisory board is actually a referendum,” Amber founder and Managing Partner Joseph Oughourlian told a news conference call. “It’s a referendum on the management of the last seventeen years.”

Arnaud Lagardere has managed the conglomerate since his father, former CEO Jean-Luc Lagardère, died in 2003.

The company did not respond to a request for comment.

“By voting for a new supervisory board, Lagardere shareholders will give the group the means to free up the driving forces of the publishing and travel retail divisions and allow all stakeholders to benefit,” Amber Capital also said in a statement.

Lagardere’s shares closed up 14.06% on Thursday.

The shares are still down 43% so far this year as the company’s travel retail business has been hurt by the coronavirus-driven collapse in global demand, and earlier this week Lagardere scrapped its financial guidance.

Amber Capital also added it wanted Lagardere to review its dividend policy and suspend its 2020 dividend to strengthen its liquidity and cash profile.

Lagardere suspended on Wednesday its market guidance for 2020 and revised its dividend to 1 euro ($1.10) per share from 1.30 euro.

“Lagardere’s free cash flow generation was barely covering its dividend before the impact of COVID-19. This means that free cash flow in 2020 is unlikely to cover the revised dividend,” Kepler Cheuvreux said. ($1 = 0.9068 euros) (Reporting by Sudip Kar-Gupta and Gwenaelle Barzic; Writing by Matthieu Protard; Editing by Clarence Fernandez, Aditya Soni and Richard Chang)

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