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Boizel votes on Lanson deal

Published:  23 July, 2008

Shareholders in Boizel Chanoine Champagne will vote on 30 January on whether the company should issue e22.7m (15.7m) of bonds as part of the financing package for the agreed purchase of troubled Lanson International for about e520m, including e400m of debt. They will do so against the increasingly hostile attitude of the CGT union, one of France's largest, which opposes the deal.

The union is applying pressure on the French competition authorities, who have to approve the takeover, by alleging that Boizel has plans to sell off Lanson's 56 million bottles of stock to LVMH, thus giving the French luxury-goods group undue power in the global market for Champagne and in the production region.

A ruling is expected later this month, and completion of the deal, if approved, is expected in the first quarter of this year.

Meanwhile, Crdit Agricole, Europe's third-largest bank, which, through a network of regional holdings is effectively controlled by France's myriad farmers and agricultural producers, is seeking to land a knockout blow on behalf of the Taittinger family in their quest to repurchase the eponymous Champagne house from hotels group Starwood International.

Taittinger was sold to Starwood last July as part of the takeover of Socit du Louvre, the French hotels group, in which the Taittingers were the controlling shareholders. Now Crdit Agricole is teaming up with 40 members of the Taittinger family in a bid to buy back the house. Crdit Agricole is effectively seeking to block other potential buyers, notably the Belgian industrialist Albert Frre. Its strategy is to buy the house in concert and then sell out its holding to the family at a later date. The purchase price is forecast to be in excess of e500m (350m).

Observers say that, by acting in this manner, Crdit Agricole will make it very difficult for a rival bidder to win the day. The bank, and the farmer-shareholders who have considerable influence over it, aim to preserve its central role in the Champagne region, where it provides 70% of the funding required by independent growers and 50% of the loans required by the Champagne houses to finance their businesses.

Starwood is expected to begin the process of selling Taittinger next month.