Believe Board Backs Takeover Bid from Denis Ladegaillerie-Led Consortium
Written by djfrosty on April 19, 2024
The board of directors of French music company Believe is supporting an offer to take it private at 15 euros ($15.98) per share, with the board’s three independent members unanimously voting in favor of an opinion that the bid is in the interest of minority shareholders, the company announced Friday (April 19).
The bid to take Believe private came from a consortium of funds managed by TCV and EQT X, along with Believe chairman/CEO Denis Ladegaillerie. The consortium’s shares, along with shares acquired from TCV Luxco BD S.à r.l., Ventech and XAnge, gave it 79.1% of Believe’s share capital. That left the board’s three independent directors — the others are connected to the consortium — to make a recommendation for the minority shareholders.
The independent directors believe the consortium’s bid is “in line with the strategy pursued by management, while benefiting from the support of major shareholders aligned with its development plan and with the ability to support the Company in the next phase of growth and market consolidation,” the company stated Friday. It also noted that minority shareholders are getting the same price offered to shareholders of the majority blocks.
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An independent expert, Ledouble, concluded the consortium’s bid is fair from a financial standpoint and lacks any “ancillary items” that could be damaging to shareholders. Citigroup, hired by the company as a financial advisor, also told the board the share price is financially fair to shareholders.
The consortium announced Friday it plans to file its offer “in the coming days.” Its offer of 15 euros per share is 21% above the share price the day before the consortium announced its takeover bid and 38.2% above the average of the last 20 trading days, according to the announcement. Still, the consortium’s bid is below Believe’s IPO price of 19.50 euros ($20.78).
No competing bids arrived for Believe, which includes digital distributor TuneCore, record labels such as Groove Attack and Nuclear Blast, and a global infrastructure that provides artists and labels with tools and services. A month after the consortium’s initial offer was made public, Warner Music Group announced its interest in Believe at “at least” 17 euros per share. However, after being given access to a “data room,” according to the release, WMG opted not to make a competing offer.
After the consortium takes Believe private, the company “will have all the necessary resources to continue the remarkable growth dynamic that the company has experienced in recent years,” Ladegaillerie said in a statement. “With the active and ongoing support of TCV, which has accompanied Believe since 2014, and the expertise of EQT, I am convinced that we will continue to make Believe the global reference for independent music, while seizing all the growth opportunities offered by the digital transformation of the music market, to put them at the service of creation and creators.”