We were twenty-odd members and guests, and with a “terrorist” in our midst at John Morris’  loft on the evening of June 11th.   The “terrorist” label for Guy Wyser-Pratte came from a French financial journal that called him an ex-marine qui terrorize nos patrons.  Wyser-Pratte, who has been called other names, including corporate raider, in his forty years of shareholder activism, did not contest the truth of that headline in his talk to the AAPA. In keeping with his straight-from-the-shoulder style, he kicked off the discussion by saying: “J¹accuse!, ” and laid into the French patronat, saying it was rife with mismanagement and is protecting itself to the detriment of insufficiently empowered shareholders.

Wyser-Pratte, who began his activism after becoming a leading figure in international financial arbitrage, referred to a study quantifying the increase in shareholder value from the time he entered a company until the time he sold his shares. The change, he said, came to an aggregate increase of $60 billion, in the nearly fifty companies where he had intervened.  He explained his tactic is to obtain a seat on a target company’s board so as to allow him to rally support for changes in governance.  “I’m not after a quick buck,” he contended  “I stay with a company for about three years.” Much of the evening’s discussion was about one of France’s most important media companies, Lagardère S.C.A., a limited partnership controlled by Arnaud Lagardère, son of the founder, who owns 10% of the company whose shares have lost 35% of their value in the past year.  Wyser-Pratte is still smarting over his unsuccessful attempt to get a seat on the company’s supervisory board two years ago. “We showed the AMF (the French financial market authority) that they had cheated on the vote (for his seat),” he said, “and the AMF did nothing about it.” But he said his fight for changes at Lagardère – where the Qatar Holding sovereign wealth fund has become the biggest single shareholder – wasn’t over. He did not reveal his new comeback strategy, however.

Wyser-Pratte set out a five-point plan for changes at Lagardère. He said it must: drop its money-losing sports sponsorship; change the structure from a limited partnership  to a normal corporate legal structure to allow full shareholder rights; ramp up digital integration in the subsidiary Hachette; cooperate with Vivendi to carry out an IPO at Canal+; and sell Lagardère’s stake in aerospace group EADS when the Airbus A350 goes into production.

Wyser-Pratte hit out at the AMF, claiming that it colludes withFrance’s corporate elite. His latest fight has been with a company called Electricité et Eaux de Madagascar, involving its shareholding in Gascogne, France’s leading paper maker, on which Wyser-Pratte has set his sights.  In a complicated squabble, the AMF has opened an investigation of charges against him of  insider trading, while he contended that, in the same AMF report, his opponents in the struggle have been pinpointed as contravening corporate governance rules. “I’m dealing with gangsters,” Wyser-Pratte claimed, noting that the AMF has done nothing to clamp down on his opponents’ actions.-


Gerry Dryansky