Tuesday, December 5, 2023

Daniel Křetínský sells Le Monde stake to Xavier Niel -Dlight News

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French billionaire Xavier Niel has bought Czech energy tycoon Daniel Křetínský out of his stake in Le Monde, in a move that will advance Niel’s longstanding plan to put ownership of the newspaper in a foundation to protect its future.

The roughly €50mn deal was agreed privately in the past month and will allow Křetínský to largely break even on his initial investment made in 2018, according to people close to the matter. An internal committee representing the staff of the left-leaning daily has been informed, as required under French law.

After the Financial Times reported on Saturday that the deal was close, Niel’s holding company NJJ Presse confirmed that it had bought Křetínský’s stake and made an “irrevocable commitment” to transfer the shares to the foundation.

The transaction will bolster Niel’s shareholding and take him a step closer to the goal he set in 2021 to move a majority stake into a foundation to ensure Le Monde’s independence and prevent takeovers. 

It will also allow an exit for Křetínský, who has been on an acquisition spree in France with investments in food retailer Casino, electronics seller Fnac-Darty, and book publisher Editis. The Czech billionaire has also entered an auction for the owner of the UK’s Telegraph newspaper and Spectator magazine, the FT revealed last week. 

Founded in 1944 at the request of Charles de Gaulle after the liberation of Paris, Le Monde has established itself as France’s biggest national newspaper with about 480,000 subscribers. For decades it was owned by its journalists and staff, but in 2010 it faced severe financial problems and sought a rescue from outside investors.

A trio made up of telecoms billionaire Niel, businessman Pierre Bergé (who has since died), and investment banker Matthieu Pigasse stepped in and recapitalised the business. To ensure the newsroom remained free of interference, they agreed to create a “pole of independence”, or a group representing Le Monde’s journalists, staff, and readers, who between them own 25.4 per cent of the group. 

The trio’s backing has helped expand the newsroom and accelerated growth of digital subscriptions. Annual revenues have hovered around €300mn since 2018, excluding a dip because of the pandemic in 2020, but profit fell to €10mn last year because of inflation and paper costs.

Křetínský’s involvement with Le Monde began in 2018 when he unexpectedly bought out half of Pigasse’s stake for about €50mn. The investment prompted outcry from editors and journalists, who criticised Křetínský’s background in heavily polluting coal companies and argued he could seek influence with the ownership of a newspaper. 

Before the Czech tycoon’s planned exit, about 72.5 per cent of the company was owned by Niel, Křetínský, Bergé’s estate and Spanish media group Prisa, while Pigasse held a small residual stake.

In an interview with the FT last month, Křetínský spoke about the turbulence surrounding his arrival at Le Monde.

“We stepped into a door that we thought was open and everyone knew we were going to step in and then later on we discovered we had invaded the room without informing people,” he said. “When you do this you simply, at the very moment, you know it is going to go against you. The negative reaction was absolutely natural.”

He added: “That has led to this situation . . . which I now think has been corrected.” 

Le Monde’s journalists’ group welcomed the news of Křetínský’s exit.

“Notified ahead of time as the bylaws require”, the group “unanimously approves the stake purchase and transfer [to the foundation]”, they said. It “will lead to the departure of a shareholder who never sought the approval of our group”.

Křetínský’s media holding company IMI said in a statement that it would “continue to support French media and to guarantee their independence as a shareholder or as a lender”.

In France, Křetínský has hired media executive Denis Olivennes and others to smooth his image and lay the groundwork for further transactions. Before his Le Monde investment, Křetínský had already bought some small magazine businesses from media group Lagardère, including the political weekly Marianne and women’s title Elle.

He is now set to expand in French book publishing with the pending acquisition of Editis, which Vivendi has to sell as a condition of its takeover of Lagardère.

Křetínský also holds a 5 per cent stake in France’s biggest private television broadcaster TF1.

According to bankers, he is considered a possible bidder for 24-hour news channel BFMTV, which telecoms group Altice is looking at selling to cut its heavy debts.

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