Continuing on the theme of shareholder activism, there’s a good piece in this week’s Financial Times again the topic, this time in France. It’s worth a read, so take a look and then come back here.

The FT article makes reference to a famous takeover attempt back in 2005. Pepsico made a hostile takeover attempt of France’s Danone group. I recall this incident well. I happened to be on brief career detour in an LBO fund at the time, and my private equity colleagues and I witnessed this gripping saga unfold in real-time on the ground in Paris. 

The French government under Prime Minister Dominique de Villepin ultimately prevailed in thwarting Pepsi’s bid. Somehow, yogurt became classified as a “strategic asset” of France, allowing the French government to invoke its newly-minted protectionist rationale. Minister de Villepin called Danone a national “crown jewel,” and warned that he would defend the strategic interests of France.

However, my opinion at the time was that the Danone victory was pyrrhic. Not because the Pepsi takeover would have unleashed more shareholder value creation than Danone had realized on its own — this may have been true but is impossible to prove either way. Rather, the Pepsi/Danone incident created a smoke screen for another foreign takeover transaction of a different set of arguably more substantial national treasures.

It may be forgotten by now, but while the French media and regulators were wrapped up in the Danone story, during that very same stretch in Summer 2005, another “jewelry heist” found success. The American private equity arm of Starwood Hotels group, quietly scooped up Taittinger Champagne and the prestigious Hotel Crillon in Paris. Colony Capital swooped in under everyone’s noses to abscond with these two of France’s arguably crownier of its crown jewels.

I admit that I still wonder to this day whether Starwood/Colony had in hand in the Danone takeover rumors.