'Le Monde' OKs Recapitalization Plan

By: (AP) Le Monde said Wednesday that its board has approved a recapitalization agreement in which Spanish publisher Prisa and French defense and media group Lagardere will each take significant stakes in the struggling French newspaper.

The daily newspaper said its board overwhelmingly approved plans for Lagardere SA and Grupo Prisa -- publisher of Spanish daily El Pais -- to contribute 25 million euros ($33.5 million) each to the capital increase alongside other potential new investors.

Le Monde said its executives are also in talks with existing shareholders in the newspaper -- including Italian newspaper La Stampa -- who may contribute as much as an additional 10 million euros ($13 million) to the deal. That would bring the total value to 60 million euros ($80 million).

The 16-0 vote, with two abstentions, gives the formal go-ahead to the bailout for Le Monde, after staff members approved the operation.

Last week's much closer vote by Le Monde journalists came after they received assurances that Lagardere will not interfere in editorial policy and that the staff will retain a management veto in the holding company which in turn controls Le Monde SA, the paper's publisher.

Along with other French newspapers, Le Monde has been squeezed between dwindling circulation and advertising revenue on the one hand and expensive, heavily unionized printing services on the other.

It is the third major French title to turn to private investors for help in recent months, and the trend has raised concerns in some quarters over the independence of the country's once-proud press.

In January, staff at Liberation -- another illustrious left-wing daily -- agreed to let financier Edouard de Rothschild take a 37% stake in their paper in return for a 20 million euros ($27 million) cash injection. Defense tycoon Serge Dassault took control of conservative broadsheet Le Figaro last year.

Lagardere and Madrid-based Prisa -- whose full name is Promotora de Informaciones SA -- had both previously confirmed their intentions to take part in the capital increase.