Deal
Le Monde accepts offer from Trio, snubbing Sarkozy
Le Monde, France's struggling newspaper of record, accepted an offer from investors including Yves Saint Laurent Group partner Pierre Berge, snubbing President Nicolas Sarkozy, who had opposed the bid.
The group of investors, which also includes Internet billionaire Xavier Niel and Lazard Ltd. banker Matthieu Pigasse agreed to pay 110 million euros ($135 million) to take control of the 65-year-old Paris afternoon daily, helping it avert a capital crunch.
By accepting the offer, the newspaper's staff rejected pressure from Sarkozy, who had told Le Monde Chief Executive Officer Eric Fottorino he didn't want the daily taken over by the trio. Berge backed opposition Socialist Party candidate Segolene Royal in the 2007 presidential election and is close to International Monetary Fund head Dominique Strauss-Kahn, a possible 2012 candidate for the Socialists.
"Le Monde is an institution, and as a result it has an important political role," said Laurent Dubois, a professor at Paris' Political Studies Institute.
The daily, founded as the German army was being expelled from France in 1944 and supported by General Charles de Gaulle, is struggling to maintain revenue as advertising migrates to the Internet. French newspapers, like their U.S. counterparts, are cutting costs and seeking new revenue as readership shrinks.
New Owners
The daily's new investors will enter into three months of exclusive negotiations in exchange for a 10 million-euro fee, Le Monde’s board said in an e-mailed statement.
If the plan presented by the investors wins the backing of the staff at the newspaper, the group's magazines and its interactive operations, it would give Le Monde "the means to develop in line with its identity and its values," Fottorino wrote in a front-page editorial in the daily today.
The investment by Berge, Pigasse and Niel, founder of Iliad SA, includes 60 million euros for debt payments and 50 million for reinvestment, Adrien de Tricornot, vice president of journalist group Societe des Redacteurs du Monde, said in an interview with Bloomberg Television yesterday.
"We consider Le Monde a common good," Berge, Niel, and Pigasse said in an e-mailed statement. "We are convinced that only an ambitious policy of re-enforcement of editorial offerings and investment in digital activity" will underpin the newspaper's future, they said.
Niel is a self-made billionaire thanks to his 64 percent shareholding in Iliad, the discount broadband provider he founded after an initial career running sex-chat services. Pigasse is the deputy CEO of Lazard’s Paris advisory unit and the owner of Les Inrockuptibles, a music magazine.
France Telecom
The Le Monde staff rejected a rival joint bid for the daily from France Telecom SA, the largest French phone company, and the Nouvel Observateur magazine. That offer came after Sarkozy had opposed the Berge bid.
Le Monde said last week it wouldn’t consider an offer from Russian billionaire Gleb Fetisov that failed to meet the deadline for bids. Offers from Berge and France Telecom were the only confirmed bids for the daily.
France Telecom Chief Executive Officer Stephane Richard had said the company wanted to assist Le Monde in its “digital transition.”
The France Telecom-Nouvel Obs offer, which also included Spain's Promotora de Informaciones SA, or Prisa, was a "particularly elegant gesture," Fottorino wrote.
Both bidders pledged to maintain the newspaper's editorial independence. "If they kill its independence, they kill their investment," de Tricornot said.
Saving Le Monde
Le Monde typically stakes out the political centre, between the left-leaning Liberation and conservative Figaro, owned by Groupe Industriel Marcel Dassault SA.
Circulation declined last year at all three major Paris newspapers. Readership fell 9.5 percent at Liberation, 4.14 percent at Le Monde and 1.76 percent at Le Figaro, according to circulation statistics office OJD.
Le Monde, based in Paris’s 13th arrondissement, cut 130 jobs after a 2008 cost-cutting exercise that aimed to save 15 million euros ($18.3 million) annually.
The newspaper last year took out a 25 million-euro loan from lenders including BNP Paribas SA that was conditional on an eventual recapitalization, Fottorino said.
"I really do think it can be rescued," said Frederic Filloux, a Paris media commentator and the editor of a blog, Monday Note. "The brand is great, and they could put some money toward a re-orientation of the paper."
(Published by Bloomberg – June 29, 2010)