MMB FP, Lagardere

1. Lagardere (MMB FP)
Event driven that should materialize in 2020
22% upside / 6.5% dividend yield in the meantime
Dec 2019
Mathias Lascar
mlascar@makorsecurities.com
+44 207 290 27 60

2. Investment case
• Lagardere is finalizing the refocusing of its businesses to publishing and travel
retail
• On 16 Dec 2019, it announced the disposal of 75% of its sports division for
110mE
• Writedown of 210/240mE due to abrupt cancellation of CAN rights
• Possible improved price should Lagardere Sports win its case on abrupt CAN rights
cancellation
• In 2019, Lagardere sold 338mE of assets in its Active division
• Lagardere Studios is in the process of beeing sold (150mE mentioned in press)
• Company to refocus on Publishing and Travel Retail. Investor day planned in
early 2020

3. Other events due to happen in 2020
• Since 16 October 2019 Lagardere Capital & Management is obliged by a
judgment from the Paris Commercial Court to publish its financial accounts
• M. Lagardere refuses to commit and appealed
• In the meantime, Lagardere Capital and Management pays 2000E/ day of penalties for
not complying with the judgment
• Situation well explained in the FT of 27 November 2019 (link below – can send you
article on demand if u need access)
• https://www.ft.com/content/83015a6e-0ae9-11ea-b2d6-9bf4d1957a67
• Risk to the Partnership: The mandates of the 3 managing partners of
Lagardere end on 25 March 2021
• Board of management votes to elect / renew managing partners
• Board members have 4-year mandates
• Under pressure from minority shareholders and activists, board could turn its back on
the 3 managing partners and Lagardere Capital and Management

4. How much is worth a partnership ?
• Roughly 20% of capital, as shown by the last voluntary cancellation of
Partnership in France: Maurel & Prom
• http://docarchives.maureletprom.fr/pdf/Maurel-et-Prom-20041215-Document_E-
Fra-2.pdf
• Point 2.1.1.1 (page 10) – structure before cancellation of Partnership
• Point 2.5.1 (page 22/23) - after

5. Lagardère Sum of Parts with Partnership
Lagardere
Price 19.96
Share 131.1
Market Cap 2,617.4
NAV 3,867.0
NAV / Share 29.5
Discount 32.31%
Number of
shares
Total number of
shares
% of interest Stock price Current value % NAV
LISTED ASSETS
T-Shares 1.96 131 1.5% 19.96 39.2 1.0%
TOTAL LISTED ASSETS 39.2 1.0%
NONLISTED ASSETS Current value
Publishing 13x EBIT 2,474.0 64.0%
Travel Retail 15.8x EBIT 2,077.4 53.7%
Active for Magazines and Radio 281.9 7.3%
Lagardere Studios 150.0 3.9%
Sports and Entertainment 26 15.0 Disposal metrics 16/12/2019 110.0 2.8%
Central costs (15) 10.0 (150.0) -3.9%
TOTAL 4,943.3 127.8%
Off Balance Sheet commitments we take 100% excluding off BS around Lagardere Sports 92.0 2.4%
Net debt Dec 2018 (1,375.0) -35.6%
Disposals Lagardere Active 338.0 8.7%
Dividend (170.5) -4.4%
TOTAL (1,115.5) -28.8%
Total NAV 3,867.0 100.0%

6. Lagardère Sum of Parts ex partnership (at
20%)
Lagardere
Price 19.92
Share 157.4
Market Cap 3,134.6
NAV 3,832.8
NAV / Share 24.4
Discount 18.22%
Number of
shares
Total number of
shares
% of interest Stock price Current value % NAV
LISTED ASSETS
T-Shares 1.96 157 1.2% 19.92 39.1 1.0%
TOTAL LISTED ASSETS 39.1 1.0%
NONLISTED ASSETS Current value
Publishing 2,474.0 64.5%
Travel Retail 2,077.4 54.2%
Active for Magazines and Radio 281.9 7.4%
Lagardere Studios 150.0 3.9%
Sports and Entertainment 26 15.0 Disposal metrics 16/12/2019 110.0 2.9%
Central costs (15) 10.0 (150.0) -3.9%
TOTAL 4,943.3 129.0%
Off Balance Sheet commitments we take 100% excluding off BS around Lagardere Sports 92.0 2.4%
Net debt Dec 2018 (1,375.0) -35.9%
Disposals Lagardere Active 338.0 8.8%
Dividend (204.6) -5.3%
TOTAL (1,149.6) -30.0%
Total NAV 3,832.8 100.0%

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