* Activist Amber, Lagardere in tussle for past four years
* Amber aiming to replace supervisory board members
* Fund calling for better governance, strategy
* Lagardere AGM to be held virtually at 1000 CET
PARIS, May 5 (Reuters) - Activist investor Amber Capital faces its biggest test yet on Tuesday in its high-stakes bid to shake up governance at media and publishing firm Lagardere as shareholders vote on its attempt to revamp the French firm’s supervisory board.
The stand-off between Amber and Lagardere has spiralled over the past four years, dragging some of the biggest names in French business and political circles into the fray as the company tries to fend off calls for a major overhaul.
Allies include media magnate Vincent Bollore and his Vivendi group, which has now snapped up Lagardere shares, while former French President Nicolas Sarkozy was brought onto the firm’s supervisory board earlier this year.
A victory for Amber would cap several frustrated attempts by activist funds to take on a conglomerate which has long been seen as hindered by sprawling investments and criticised for its underperformance on the stock market.
It would also mark a first real success by an activist investor in France, where such funds rarely made incursions until recently, put off in part by an abundance of family-owned businesses.
Amber, founded by Joseph Oughourlian, a former Societe Generale banker, has gradually increased its stake to 18%, making it Lagardere’s top shareholder ahead of the Qatari Investment Authority and Vivendi.
It has put forward eight people - including former Italian Prime Minister Enrico Letta - to replace most of the members of Lagardere’s supervisory board, though the fund has said it would agree to ratify Sarkozy’s appointment, and that of Guillaume Pepy, the former head of France’s state-owned rail group SNCF.
Amber has billed the vote, which will be held virtually due to the coronavirus crisis, as a referendum on Chief Executive Arnaud Lagardere’s performance, at the helm since his father and ex-CEO Jean-Luc Lagardere died in 2003.
In particular, it hopes to dismantle a so-called “commandite” structure which allows for different categories of shareholders and effectively gives Arnaud Lagardere vast control over the company with just over 7% of the shares.
The company’s supervisory board does, however, have the power to oppose the reappointment of Arnaud Lagardere as the commandite’s “manager” when his term expires in March 2021.
The showdown comes as Lagardere, which owns Europe 1 radio in France, braces for further pain from the coronavirus crisis, especially in its travel retail business. It expected revenues there to have fallen some 90% in April. (Reporting by Sarah White and Gwenaelle Barzic; Editing by Mark Potter)