NEW YORK — As the globe’s media focuses on Iraq, an issue lost in the shuffle is the possible fate of Saddam Hussein’s own media stake: a 2 percent holding in Lagardère SCA, parent of publisher Hachette Filipacchi Magazines.
Once the Hussein government is toppled, officials at the United Nations and U.S. Treasury Department hint, the shareholding most likely will be inherited by whatever postwar government is put in place. If so, Lagardère will be happy to help take those shares off Iraq’s hands.
Hachette’s main titles are Elle, Premier, Paris Match and Car & Driver.
Montana Management, a front company of Hussein’s, acquired the 2 percent stake in Lagardère on the open market before Iraq’s invasion of Kuwait in 1990. After the United Nations imposed sanctions, the French government froze Montana’s assets, including its roughly $90 million stake in Lagardère, and created an ongoing p.r. headache (although media buyers insist the holding has little or no impact on advertising in Hachette’s magazines). The company’s representatives stress they are paralyzed until sanctions are lifted. “It’s a U.N. story, not a Hachette story,” said Fred Marcusa, a partner at Kaye Scholer LLP, Lagardère’s counsel in New York.
But officials at the U.N. are unclear on what that story is. “The issue has not been relevant up until this point,” said a U.N. official working with the committee on Iraq. He added, “The assets are frozen because they still belong to Iraq. Who will have them afterward? They’ll still belong to Iraq, whoever that might be.”
A senior official in the Office of Foreign Asset Control at the U.S. Treasury Department says the lifting of U.N. sanctions after the war “could be done fairly quickly, but the sorting of assets could be a longer process” of up to several years. The official said the Treasury had recently seized $1.7 billion in U.S. deposits made by Iraqi banks known to be controlled by Hussein, and that those deposits were earmarked for the new government.
For its part, Lagardère, said a company spokeswoman, “would help facilitate the sale of the stock, whenever that happens.” Considering that Iraq currently has an estimated $100 billion in debt, its new government would likely be in a selling mood.