Loss-making Lagardere had already been sparring with activist fund Amber Capital over its performance and governance, but now the French conglomerate could get caught up in a possible tug-of-war between Arnault and Bollore.
Lagardere, which has travel retail, book publishing and owns French media outlets, had turned to the two billionaire dealmakers for help as it fended off Amber, only for Bollore to later side with the activist on some demands.
Arnault, who controls Louis Vuitton owner LVMH, said his investment firm would take a 27% stake in the personal holding company of Arnaud Lagardere, which should help to alleviate financial pressure on that indebted vehicle.
"This investment gives tangible form to the long-standing relationship between our two families," Arnault said, adding that he was committed to the integrity of the Lagardere group and its main publishing and travel retail businesses.
The deal, originally announced in May, is only due to be completed in September.
It also signals Arnault's support for Arnaud Lagardere, who has run the Lagardere business since his father's death in 2003.
Last week, Bollore, whose Vivendi media group now owns 23.5% of Lagardere, unexpectedly teamed up with Amber, which has a 20% holding, to demand four board seats between them.
Arnault and Bollore's Lagardere stakebuilding has fuelled speculation that the two billionaires want to carve up Lagardere, which includes French publisher Hachette, a possible fit for Vivendi.
The travel retail division, meanwhile, although hit by the coronavirus pandemic, could sit well within LVMH's luxury empire. And as well as Paris Match, Lagardere owns Europe 1 radio and the Journal Du Dimanche newspaper.
KNIFE SHARPENING
Bollore and Arnault have until now maintained a respectful if distant relationship, people close to the billionaires said.
But the jostling for position over Lagardere's strategy and assets is expected to intensify over the coming weeks, with Vivendi and Amber due to call for a general shareholder meeting.
"Everything is getting more tense," one person close to the one of the main players said. "The parties are sharpening their knives."
Relations between Vivendi and Lagardere were dealt a further blow this week when Lagardere's board renewed Arnaud Lagardere's mandate as managing partner seven months ahead of schedule.
Neither Amber nor Bollore and Vivendi had been aware that the company's board was due to meet, two sources familiar with the matter said.
Spokespeople for LVMH, Vivendi and Lagardere declined to comment.
One of the trickiest aspects of the potential corporate battle will be Lagardere's arcane "commandite" structure, a kind of limited partnership that allows Arnaud Lagardere to lead the group with only 7% of the shares.
Amber has campaigned to get it abolished, which would alter the power dynamics among shareholders.
(Reporting by Sudip Kar-Gupta and Sarah White; Editing by Jason Neely/David Holmes/Jane Merriman)
By Sudip Kar-Gupta and Sarah White
