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Tue 3 Jan 2012 05:16 PM

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Qatar wealth fund eyes board seat at Lagardere

Gulf emirate last month raised its stake in French conglomerate to over 10%

Qatar wealth fund eyes board seat at Lagardere
Qatar owns a 10.1% stake in French conglomerate Lagardere

Qatar's sovereign wealth fund may seek a supervisory board
seat and strategic partnership with Lagardere, potentially deepening its ties
with the French media-to-aerospace conglomerate in which it is the biggest
shareholder.

Qatar Holdings said in a letter published on Tuesday by
French stock market regulator AMF it may raise its stake, but would not seek to
take over the company.

Lagardere is effectively insulated from takeover by a governance
structure, known as a commandite. This gives broad powers to chief executive
Arnaud Lagardere.

The oil-rich emirate has been a staunch supporter of Arnaud
Lagardere even though some shareholders have assailed the CEO's strategy for
the company his father founded.

Qatar Holdings notified the AMF on Dec 29 it had raised its
stake in Lagardere
to 10.1 percent from roughly 7.6 percent.

The news boosted the shares, which slumped more than 30
percent last year as expected asset sales failed to materialise and Europe's
economic woes weighed on the magazine and radio businesses that rely on
advertising revenue.

Lagardere competes with Pearson Plc and Bertelsmann AG in
book publishing and radio.

Also a top shareholder in Airbus parent EADS, Lagardere issued
two profit warnings last year as its fledgling sports business was plagued by
operational problems.

Lagardere shares were up 3.4 percent at 1241 GMT, compared
with a 0.8 percent decline in France's blue-chip index.

A Paris-based trader said the Qatar fund's higher stake, and
potential future partnerships, would support Lagardere shares in the short
term.

"They [Qatar fund] have the money and can clearly enter
into a partnership: both the sports activities and EADS could potentially
interest Qataris longer term."