LAGARDERE (EPA:MMB) - Proposed conversion of Lagardère from a partnership limited by shares into a joint-stock company

Transparency directive : regulatory news

28/04/2021 07:00

Paris, 28 April 2021

Proposed conversion of Lagardère from a partnership limited by shares into a
                             joint-stock company

The Supervisory Board of Lagardère SCA has positively received the proposal
presented by Arnaud Lagardère to submit the conversion of Lagardère SCA into
a joint-stock company to the 30 June 2021 General Meeting.

This proposal is made in the perspective of:

* Composed shareholder dialogue, the main investors in Lagardère SCA having
agreed to vote in favour of the proposal, and Lagardère and Amber Capital
having agreed to terminate their legal disputes;

* Renewed governance structure, allowing representation of the main
shareholders on the Board of Directors;

* Continuity of management around Arnaud Lagardère, who would be appointed
Chairman and Chief Executive Officer, and Pierre Leroy, who would be appointed
Deputy Chief Executive Officer, with added focus on operational excellence and
cash generation;

* Reaffirmation of the integrity of the Group, focused on its two pillars,
Lagardère Publishing and Lagardère Travel Retail, together with its the Other
Activities.

As consideration for relinquishing their rights, the General Partners would be
allocated ten million new shares. The consideration would be the subject of a
valuation report prepared by an independent expert commissioned by the
Supervisory Board which will render its opinion on the contemplated
conversion.

The proposed conversion is subject to obtaining an exemption from a tender
offer from the French financial markets authority (Autorité des marchés
financiers - AMF) and the approval of the general meetings of the shareholders
and the bondholders.

The proposed conversion would represent an important milestone in the Group's
history, built upon leadership in its different businesses and highly-committed
teams.

                                    ***

Main terms and conditions of the proposed conversion:

Support of the major shareholders

The proposed conversion (hereinafter the "Conversion") and its terms and
conditions were submitted by the General and Managing Partners to the main
shareholders(1) of Lagardère SCA (hereinafter "the Company"), who have agreed
to support it. No shareholders' agreement or other common policy exists or will
exist between these main shareholders and the Company(2), and none of them will
exercise control over the Company after the Conversion.

In conjunction with the Conversion, Arnaud Lagardère and Financière Agache
amended their partnership agreement within Lagardère Capital. Subsequent to
the Conversion, Financière Agache may elect to receive Lagardère shares held
by Lagardère Capital up to the amount of its interest in Lagardère Capital.

The Company and Amber Capital have signed an agreement to terminate the various
legal disputes between them.

Compensation of the General Partners

The General Partners, Arnaud Lagardère and Arjil Commanditée - Arco, would to
be compensated for the loss of their rights through the allocation of a total
of 10 million new shares.

Corresponding to c. 7.62% of the Company's share capital prior to the issuance
of the shares and c. 7.08% of the share capital after their issuance, this
compensation will be the subject of a report prepared by the firm Ledouble,
acting as an independent expert commissioned by the Supervisory Board, which
will render its opinion on the contemplated conversion on the basis of this
report.

Governance

The proposed governance structure is intended to ensure management continuity
for the Lagardère group ("the Group") around Arnaud Lagardère's leadership,
and representation of the main shareholders on the Board of Directors.

Arnaud Lagardère would be appointed Chairman and Chief Executive Officer for
the duration of his six-year term as a director and Pierre Leroy would become
Deputy Chief Executive Officer.

Management services, which are governed by the Service Agreement currently in
force between Lagardère Management and the Group, would be brought in house by
the end of 2021 in line with terms and conditions to be defined by the
Company's Board of Directors.

The Board of Directors would have eleven members, including two directors
representing employees appointed by the Group Employees' Committee and nine
members appointed by the Annual General Meeting, as follows:

* three directors proposed by Arnaud Lagardère, including two independent
  directors;

* three directors proposed by Vivendi, including two independent directors;

* one director proposed by Qatar Holding LLC;

* one director proposed by Amber Capital;

* one independent director proposed by Financière Agache.

The directors would be appointed for four-year terms, except for Arnaud
Lagardère, who would be appointed for six years.

Special measures would be introduced to prevent any transmission of sensitive
information and limit participation in certain discussions to directors
appointed by certain shareholders for as long as those shareholders control an
activity that competes with the activities of the Group.

(1) Vivendi, Qatar Holding LLC, Amber Capital and Financière Agache, which
together with Arnaud Lagardère hold 76% of the Company' voting rights.
(2) Save for previously disclosed concerts, i.e. (x) the concert between Arnaud
Lagardère and the entities controlled by him and Financière Agache and
Agache, and (y) the concert between Amber Capital UK and Amber Capital
Italia.

For a period of six years from the Conversion:

- the Company's main shareholders will have the right to propose the
appointment of directors, as indicated above, provided the minimum levels of
share ownership(3) in the Company are maintained;

- the removal and replacement of the Chairman and Chief Executive Officer and
the Deputy Chief Executive Officer, as well as any reduction in the conditions
of their remuneration, and the appointment of new Deputy Chief Executive
Officers, would require a decision of the Board of Directors, based on a
two-thirds majority of its members.

Lastly, any disposal of publishing, travel retail or media assets representing
revenue exceeding a threshold set for each of these activity groups(4), would
require the authorisation of the Board of Directors, based on a three-fifths
majority of its members.

Conditions precedent to the Conversion

The Conversion will be carried out subject to the fulfilment of the following
conditions:

* an exemption from a tender offer is obtained from the AMF and such decision
is cleared of any appeals;

* the Conversion is approved by the general meetings of the Company's
bondholders to be held by early June 2021;

* the Conversion is approved  by the general meeting of  the  Company's
shareholders, to be held on 30 June 2021.

                                     ***

A live webcast presentation, in French, will be available today at 08:00 a.m.
(CET) on the Group's website (www.lagardere.com).

The presentation slides will be made available at the start of the webcast.

A replay of the webcast will be available online after the presentation.

An English version of the webcast replay will also be available online later
on.

                                    ***

(3) Each shareholder could appoint a member as long as they hold at least 5% of
the share capital. Arnaud Lagardère could appoint two members if he holds at
least 6.5% of the share capital and three members if he holds at least 7.5%.
Vivendi could appoint two members if it holds at least 15% of the share capital
and three members if it holds at least 25%.
(4) EUR50 million for publishing, EUR100 million for travel retail, and EUR10
million for media, taken individually or aggregated over 12 months.

Created in 1992, Lagardère is an international group with operations in more
than 40 countries worldwide. It employs some 28,000 people and generated
revenue of EUR4,439 million in 2020.
In 2018, the Group launched its strategic refocusing around two priority
divisions: Lagardère Publishing (Book and e-Publishing, Mobile and Board
games) and Lagardère Travel Retail (Travel Essentials, Duty Free & Fashion,
Foodservice).
The Group?s operating assets also include Lagardère News and Lagardère Live
Entertainment.
Lagardère shares are listed on Euronext Paris.
www.lagardere.com

Press Contacts

Thierry Funck-Brentano
Tel. +33 1 40 69 16 34
tfb@lagardere.fr

Ramzi Khiroun
Tel. +33 1 40 69 16 33
rk@lagardere.fr

Image 7 contacts
Anne Méaux
Tel: +33 6 89 87 61 76

Investor Relations Contacts
Emmanuel Rapin
Tel. +33 1 40 69 17 45
erapin@lagardere.fr

Alima Lelarge Levy
Tel. +33 1 40 69 19 22
alelargelevy@lagardere.fr

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