A family rift at Louis-Dreyfus is pitting the powerful Russian-born widow of its scion and former chairman against other descendants over a billion-dollar stake in the secretive Swiss commodities giant.
Robert Louis-Dreyfus ran his family’s commodities firm until 2009, when he died aged 63 of complications from leukemia.
His widow has undergone a remarkable transformation from inconspicuous housewife while her husband was alive to one of the most powerful people in the opaque world of commodities after his death.
Margarita Louis-Dreyfus, who had twins at 53 with Blackrock executive Philipp Hildebrand in March, is estimated by Bloomberg and Forbes to be worth around $7 billion.
She has fallen afoul of four members of the Louis-Dreyfus family, who are unsatisfied with her chairmanship of the commodities trader and are seeking to lower their shareholding from 20 percent to just 3 percent, «The Wall Street Journal» reported.
The Louis-Dreyfus family members are taking Margarita to court over how to value their share in the firm. At the same time, Margarita is casting about for an investor in the firm, in part because she is heavily indebted. A slump in commodities prices is not helping her cause.
Separate Lives
How the family has handled the question of its ownership of the commodities firm, which has been valued at up to $8 billion and had once considered going public, is a primer for other wealthy families.
Before his death in 2009, Robert Louis-Dreyfus put his controlling shares in the family firm into a Liechtenstein-based trust overseen by three so-called «protectors», one of whom was Margarita. His widow (pictured below) later pushed out her two fellow protectors and installed new ones, according to the «Wall Street Journal».
An added complication: Margarita and Robert had led separate lives in the 1990s, according to the «WSJ»: he had started a relationship with Nicole Junkermann, who is now a prominent European private equity investor.
Robert and the Louis-Dreyfus never expected Margarita, a quiet and unassuming mother to their three sons while her husband was alive, to want or aspire to run a billion-dollar commodities giant.
Maltese «Liebchen»
But she quickly began taking a far more vocal role in the family’s business after his death, often showing up at company offices accompanied by her dog, a Maltese called «Liebchen» – Sweetie in German.
Her late husband had fostered intense loyalties among his business associates, many of whom became disillusioned after Margarita began exercising influence, a source familiar with the matter told finews.com.
Her current challenge: buying out the remaining family members and keeping a lid on the family rift over valuation which has ended up in Amsterdam court, all while overseeing a commodities giant which has had four CEOs in the last five years.
She is up to her neck in $600 million of debt at the Liechtenstein trust she controls the company through after financing the purchase of shares from family members who have already chosen to sell.
Million-Dollar Debt Burden
It is unclear how she can raise financing to buy out the 16.6 percent that her late husband’s family now wants to offload. She recently sold French football club Olympique Marseille – her late husband’s passion — to an American trade buyer.
Temasek, Singapore’s state investment company, considered buying a stake in the commodities firm late last year, according to the «WSJ», after an initial look in 2009. It is unclear what came of the deliberations; Temasek and Louis Dreyfus didn't comment to the «WSJ».
Unclear Role
Hildebrands’s role in the Louis-Dreyfus story is unclear: formerly the head of Switzerland’s central bank, he is now a vice-chairman at Blackrock and splits his time between Switzerland and London. He and Margarita have been spotted together at the World Economic Forum in Davos with high-profile contacts like IMF boss Christine Lagarde.
Though Hildebrand is often seen in Zurich, Louis-Dreyfus inhabits a secretive bubble that is only possible in low-key Switzerland. Because is his financial background, Hildebrand is generally assumed to have taken a proprietary interest in the financial affairs of his partner.
