French distribution group Bac Majestic has revealed the name of its 'white knight': Belgian entrepreneur Michel Litwak and his company Fragum III, who will help turn around the beleaguered company.
Bac, which issued a profit warning in May, was seeking a $12.3m (Euros13m) lifeline in order to survive. The lifeline will take the form of a new holding company, Messine, 75% controlled by Litwak, through Fragum III, with the rest held by Bac Majestic's chairman Jean Labadie.
Messine will take part in a capital increase of some Euros 13m, which will be made up of cash provided by Fragum III, Labadie's shares in Bac Majestic as well as being open to public investment. The capital increase is to be finalised by September 15 and Messine will end up holding between 65% and 82% of Bac Majestic. Litwak will be Messine's chairman and CEO, with Labadie becoming general manager.
Bac Majestic, whose activities spanned distribution, video games and exhibition and which was floated on the stock-market in July 2000, sold off its Paris theatre chain at the end of 2001.
In a profit warning, the group, whose turnover increased 20% in 2001, to $88.8m (Euros 94.1m), stated that it would miss its $3.89m (Euros 4.12m) profit forecast for the 2002 financial period.
Bac lost a major source of high-profile foreign product in May, when Miramax International announced that it was setting up a joint French distribution venture with French broadcaster TF1. Bac has accused Miramax of terminating the agreement early and Miramax has now reportedly retaliated by filing suit against Bac.