Bollore opens rift with France's richest man over Lagardere

By Mathieu Rosemain and Sudip Kar-Gupta

PARIS (Reuters) - Billionaire Vincent Bollore is opening a rift with LVMH's chief <LVMH.PA> Bernard Arnault by unexpectedly siding with activist fund Amber Capital over Lagardere <LAGA.PA> to seek representation at the board of the struggling media group.

The move represents a new turn of events in a months-long battle triggered by Amber over Lagardere's governance, led by the embattled group's founder heir, Arnaud Lagardere.

Vivendi's <VIV.PA> top investor Bollore is throwing the 23.5% of share capital the media conglomerate owns in Lagardere behind Amber's 20% stake by signing a pact with the investment firm to demand four of the nine supervisory board seats at Lagardere -- three for Amber, one for Vivendi.

The two groups will call for a new general meeting "as soon as possible," a spokesman for Amber said. A source close to the matter said such a meeting may take place in September.

The five-year pact, which includes a reciprocal right to preemptively buy the shares each company owns in Lagardere if one of the two were to sell, represents a departure from Bollore's previous position of full support for Arnaud Lagardere.

Both have said they were friends.

Before Lagardere's last general meeting in May, Bollore joined other members of the French business elite to successfully fend off Amber's attempt to shake up Lagardere's "commandite", a kind of limited partnership that allows Arnaud Lagardere to lead the group with only 7% of the shares.

Soon after Amber was defeated, Arnault made the surprise move to buy 25% of Arnaud Lagardere's family office, bolstering up the heir's finances and giving him greater sway over the 'commandite'.

Yet Amber and Bollore will seek to get rid of the protective partnership, a source close to the matter said.

"The 'commandite' is an aberrant management system, which is tolerable in good times but much harder to tolerate in bad times," one source close to the matter said.

Vivendi insisted on Lagardere's "poor results" to explain its decision to side with Amber.

"All we know is that the results are very, very bad and we need a change," a spokesman for Vivendi added.

Lagardere, which owns France's biggest publishing group, posted a first-half loss of 481 million euros (433 million pounds) and a sharp drop in revenue.

Asked whether Bollore's move pitted him against Arnault, France's richest man, LVMH and Lagardere declined to comment. They also declined to comment on the Amber-Vivendi joint announcement.

(This story corrects third paragraph to show Vivendi's stake in Lagardere is 23.5%, not 20%, and Amber's share in Lagardere is 20%, not 23.5%)

(Reporting by Sudip Kar-Gupta; editing by Muralikumar Anantharaman, Jason Neely and Chizu Nomiyama)