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Milk & Honey Music + Sports + Ventures has acquired VMG Sports, the boutique sports agency that’s home to Kansas City tight end, three-time Super Bowl winner and Taylor Swift love interest Travis Kelce along with 14 other NFL players. In a deal broked by Milk & Honey president/founding partner Lucas Keller and VMG agents […]
Hipgnosis Song Management (HSM), the investment advisor for the troubled music royalty fund Hipgnosis Songs Fund that has come under scrutiny for its handling of accounting issues, released a statement Monday (April 22) saying it has “repeatedly been blamed for many issues affecting the [Songs Fund] which were not HSM’s responsibility” and that it “will vigorously protect its interests should the [Songs Fund board] purport to terminate” it as investment advisor.
The statement comes after a wave of headlines in the past month dating back to the March 28 release of a report by Shot Tower Capital which alleged that HSM, as investment advisor for Hipgnosis Songs Fund — which owns full or partial rights to song catalogs from the Red Hot Chili Peppers, Shakira and Neil Young, among others — overstated its revenues, the scope of its assets and its earnings in disclosures to investors and regulators. That followed a vote last October in which shareholders first rejected a proposed sale of some of the fund’s song catalog and a subsequent vote of no to continuation — the equivalent of a vote of no confidence — in the fund’s previous board and its investment advisor HSM, prompting the formation of a new board with a new chairman, Rob Naylor. (Merck Mercuriadis, the founder of the fund, moved from CEO of HSM to chairman in February.)
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In the past few days, two potential takeover bids have been submitted to the board of Hipgnosis Songs Fund: one from Concord at $1.4 billion and the other from Blackstone, which is the majority owner of HSM, at $1.5 billion. The initial Concord bid suggested that the publishing company would take over management of the fund’s catalog from HSM, which would require 12 months’ written notice; a fee equal to one year of services; and, at the end of that year, allowing HSM to exercise a call option to buy the portfolio’s assets by outbidding any competing offer, according to previous filings.
In the new statement, HSM indicates that it would exercise that call option if it becomes necessary.
“Based on extensive legal advice we are confident that the [Songs Fund] has no legal grounds to terminate our relationship without being subject to HSM’s contractual rights contained in the [investment advisory agreement, or IAA],” Hipgnosis Songs Management’s statement reads. “HSM has explained this in detailed legal correspondence with the [fund]. The [fund] has not responded to HSM on the legal arguments it has presented.
“HSM will vigorously protect its interests should the [fund] purport to terminate the IAA,” the statement continues. “We will use all means necessary to defend our contractual position and interests. It is important that shareholders, songwriters and artists understand that HSM has acted appropriately and professionally in our role as Investment Advisor and fully in accordance with the IAA.
“To be clear, were the [fund] to purport to terminate the IAA and/or hand HSM’s responsibilities under the IAA to a third party, HSM and its majority shareholder are fully resolved to protect all of our rights under the IAA, including the right to exercise the call option to acquire the [fund]’s assets.”
Earlier today, the board of Hipgnosis Songs Fund said that, were Blackstone to officially file its $1.5 billion bid to take over the company, it would support that option over the Concord bid from last week. And given Blackstone’s majority ownership of HSM, it would presumably follow that HSM would then continue in its role as investment advisor, meaning HSM would not have to exercise its call option in the end. The Blackstone bid is effectively the same as the call option.
Further bids may still arise as the situation continues to unfold. The next step would be a June 10 meeting in which shareholders would vote on approval of any bid that formally comes in.
Emily Lichter has managed the band Lake Street Dive for more than a decade, since “they were playing for tips” in small clubs on Manhattan’s Lower East Side. While the retro-pop group is not a household name, their fortunes have changed quite a bit: Later this year, they’re slated to play New York’s legendary Madison Square Garden for the first time, where capacity ranges from 12,000 to 18,000, depending on the configuration of a show.
“Our joke is they’re the biggest band that no one’s ever heard of,” Lichter says.
Sure enough, some onlookers have expressed surprise that the band has the oomph to headline the World’s Most Famous Arena. “Someone asked me who Lake Street was supporting at MSG,” adds Leigh Millhauser, the band’s agent at Wasserman Music. “And I said: Themselves.”
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Every year, a new crop of artists tries to level up their live act and make the leap to arenas. Going for it can be fraught — even for those who are confident they can pull it off. “I’ve heard all the horror stories about people who make the arena jump too soon,” says Ed Harris, manager of Cigarettes After Sex, the tranquil rock band who will also play MSG for the first time later this year. “You’ve got to be very careful.”
“You can’t have a weak stomach,” agrees Andrew Friedman, who manages Wallows, playing their first MSG show in August. The process can involve “a lot more sleepless nights, and more calls to the band’s agents and promoter than they would probably love,” Friedman continues.
Managers and agents often speak about the live side of the music business as if they are basketball coaches stressing the importance of fundamentals in post-game interviews. Be “methodical” and “consistent;” rely on “hard work” and “elbow grease.” Nearly everyone offers up a variation of the same phrase: “Don’t skip steps.” (Olivia Rodrigo used a version of this rationale to explain why she didn’t jump straight to arenas after the runaway success of her first album.)
“You’re trying to sell out every show and you’re trying to not go backwards,” says Robby Fraser, a partner at WME Music. “A way to not go backwards is not jump ahead too fast.”
Those who don’t adhere to those rules — who try to fill an arena without the highly enthusiastic fan base needed to support the move — may see their live opportunities suffer down the line. “Festival bookers want to know you’re worth X tickets,” explains Kirk Harding, co-owner of the label and management company Bad Habit. “If you’re out here saying you’re worth 10,000 tickets, and 5,000 people show up, you’re not as hot as you’re telling them. You might not get that festival slot you want, which is huge.”
On top of that, “the artists’ egos get bruised” when ticket counts come up short, according to Duffy McSwiggin, svp at Wasserman Music. Acts can become the butt of jokes, as screenshots showing large patches of empty seats or bottom-of-the-barrel ticket prices circulate on social media. Plus logistically, “there’s damage control we have to do,” McSwiggin continues. “That might be rescaling the house, closing the top and moving people down — that takes a lot of people hours.”
To avoid ending up in this position, agents say they pore over data from past shows, trying to determine the extent of the demand for a performance in any given market. Streaming numbers offer one measure of an artist’s appeal, but they are less useful for gauging whether a listen will support an artist financially, whether that means buying a ticket or merchandise.
“Somebody can have 4 million monthly listeners on Spotify, but they might not even fill out a 500-capacity club,” Fraser says. “Those are people that at one point click a button. But that doesn’t really equate to your faithful fans.”
Instead of scrutinizing streams, Millhauser is “obsessed with all the data surrounding previous market plays:” For example, “did the tickets blow out at the on-sale or slowly trickle to sell-out;” “what zip codes did the fans come from;” “was it a Tuesday night show or a Friday night show last time?”
Managers have their own rules of the road. “When you can put up two Radio City shows” — capacity over 5,700 — “and sell them out quickly, that is a clear indicator that you’re worth Madison Square Garden,” says Drew Simmons, a partner at Foundations Artist Management. (A rep for MSG did not respond to requests for comment.)
After Lake Street Dive performed two nights at Radio City in 2022, the band’s team performed “a zip code audit,” Lichter says, and found that just 31 people attended both nights. “Add up all those tickets, and you’re like, ‘we sold around 10,000 tickets,’” she explains. “That’s kind of an MSG.”
For Mt. Joy, who are making their MSG debut in September, the equation was different. “Last year we did two Central Parks,” says Jack Gallagher, the band’s manager. Like Radio City, Central Park Summerstage can fit more than 5,000 people.
However, “arenas are way harder to sell than a field,” according to Gallagher — with a field, “people don’t have to coordinate with their friends and figure out where they’re going to sit, and seats are cheap.” While “it’s definitely still a risk to put up a venue that’s not much bigger than two Central Parks,” he continues, “we just went for it.” (Ali Hedrick, a partner and agent at Arrival Artists, points out that the band has played more than 30 times in the state of New York since 2017; New York City and Chicago are two of the group’s strongholds.)
Wallows also took an alternate route to MSG. “We know that the audience wanted to be close to the band and on the floor,” Friedman says, “and those balconies at Radio City, they’re far away.” Instead, Wallows elected to perform four shows at Terminal 5, a 3,000-capacity venue. “Now do we go back and do Radio City?” Friedman asks. “That starts to feel like a lateral move. You can either play it safe, or you can take a swing.”
Some artists have gusts of wind at their back which might speed their path to arenas. Many bands didn’t tour during COVID, but once the world began to open up somewhat, Mt. Joy “did 33 drive-in shows” — outdoor performances with social distance measures in place — “during the pandemic,” according to Hedrick. “So when other artists went away, they kept touring and played in front of a lot of people. That was one thing that made them stand out from the crowd” when life returned fully to normal.
It’s not surprising that TikTok virality can also give a band a lift. Before COVID, Cigarettes After Sex typically played 3,000- to 5,000-capacity venues. Then during the pandemic, a new audience started to find the band’s music on TikTok. “That injected steroids into everything,” Harris says. “The fan base got a lot younger and a lot more enthusiastic.” Last year, the band played Forest Hills Stadium in Queens, which fits more people in some scenarios than MSG, even if it’s less iconic.
One of Harding’s longtime management clients is The Neighbourhood, who spent much of their career steadily growing their live business. “Touring was leading the way; it wasn’t streaming super heavy,” Harding says.
During COVID, songs from The Neighbourhood became the soundtrack of choice for millions of TikTok videos, leading to a hefty increase in streaming. “Should they reassemble and come back from hiatus, they’ll do an MSG now if they want to — when you have explosive moments, you can maybe miss a step,” Harding says.
But “if you’re not having those, you’re just slowly building,” he continues. “You quietly, diligently take the steps until people are like, ‘Wait, they’re worth that many tickets? I had no idea.’”
When Annie Ortmeier was appointed co-president at Triple Tigers in September, one of the programs she undertook was retooling Scotty McCreery’s online presence.
One person, rather than an independent firm, was devoted to the singer’s social media, and in the first six months, his email list doubled in size alongside growth in his streaming and his online followers. When McCreery received the trophy for CMT digital-first performance prior to the CMT Music Awards on April 7, it marked his first win at that ceremony in 12 years, and Ortmeier took it as a sign that their revised marketing efforts are working.
“We made voting a part of our social media strategies since the nominations came out,” she says. “I can’t help but think that had a lot to do with him winning that award.”
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Ortmeier and Warner Music Nashville co-president/co-chair Ben Kline are the first two country label heads whose paths to leadership included working full time in digital marketing. Ortmeier’s journey started in 2004 at CMT.com, where she ventured into ecommerce for CMT, VH1, VH1 Classic and Comedy Central. She segued into digital marketing for Universal Music Group Nashville.
Kline started more traditionally in the 1990s with the pop divisions of PolyGram and Island before joining UMGN in 1997, staying in Nashville for a dozen years. By the end of that run, new media had become part of his job title. He left to work for three years at InGrooves, a company focused strictly on distributing and marketing music online. It was a key piece of his development as a 21st-century music executive prior to his 2014 return to Nashville with WMN.
“Every decision we made [at InGrooves] was viewed through the digital lens, and we were raising money and going through a couple rounds of funding, and the conversations all were digital: ‘What’s the future? What’s next? What are the growth patterns?’” he recalls. “It was a digital-driven business, and you had to understand the ins and outs of how to speak to consumers and speak to partners in that space.”
Both Kline and Ortmeier first devoted their efforts to digital music and promotion full time in an era when CDs and airplay were still the primary vehicles for the country genre. Their early commitment to then-new platforms uniquely positioned them to take label reins once the industry’s drivers flipped.
“I was working in streaming when it was 15% of the business,” Ortmeier recalls of her earlier UMGN work. In more recent years, “it was 85% of the business. So it completely inverted.”
Label leadership has changed dramatically in Nashville. In the earliest years of the business, record company heads — including Chet Atkins at RCA, Owen Bradley at Decca and Ken Nelson at Capitol — tended to be producers. It made sense; labels earned their money by selling singles and albums that were exposed through radio, and producers generally had a handle on the sounds that worked on-air. But as the industry increasingly relied on the sales of more expensive albums, record companies more frequently gave the top position to promotion and marketing execs, including Joe Galante at RCA, Bruce Hinton at MCA and Rick Blackburn at CBS.
Now that artists and labels reach listeners through virtual platforms, the industry’s central companies are turning to people who were on the front lines as those new avenues emerged, providing more data than was ever available before. Understanding that information is key to every modern marketing plan. But knowing when to apply humanity to the numbers is just as important.
“Data can make smart people look dumb or make dumb decisions,” Kline reasons. “Analytics and data help inform, but it can’t be how your decisions are all based. Gut and instinct and knowledge and past experience — they all have to play a role.”
One of the key lessons of past experience, however, is that the past may not be much of a predictor for how to reach fans in the future. Taylor Swift famously built some of her earliest fan base on Myspace, which is now a quaint relic with outdated accounts. Luke Combs came to prominence by introducing his music on Vine, which was shut down in 2017.
“Whatever is working today, enjoy it today, because it may not work tomorrow with the digital world,” Kline says.
That same digital environment has radically changed the way that labels and artists find one another. In another era, artists’ consumer marketing started primarily after they signed a recording deal and started releasing music. Now the artist already has a fan base before labels will even consider a signing, and the act is usually savvier about how to interact with that audience. Thus, meetings with an artist in 2024 are different than they would have been in, say, 1994.
“They’re creating fans, they’re talking to them, they’re sharing music, they’re getting their music heard,” says Kline. “Think about the stories that artists bring by the time they go sign deals versus what it was 30 years ago. I mean, it’s unbelievable, so the conversation has to change.”
Similarly, that overall country audience is different. Streaming platforms make more artists and more genres available, so even core country listeners are likely to ingest a wider range of music. Similarly, the genre is accessible to a much larger slice of the population. Thus, the current Beyoncè moment is possible, in part, because of streaming. Cowboy Carter is connecting because she was able to harness her established audience in addition to appealing directly to country fans. Had she attempted to cross over in ’94, her primary options of exposure would have been late-night TV appearances, prominent in-store placement and whatever radio play she could muster. PDs who were protective of country’s identity would have felt reluctant to give a playlist slot to a pop singer who was likely to stick around for only one album.
“It does open up a consumer who never thought they were a country fan, much like Garth Brooks did 30-plus years ago,” Ortmeier suggests.
The shift to digital marketing and distribution in country directly aided the rise of Kline and Ortmeier to label leadership. Streaming is here to stay, so it’s a good bet that these two execs are setting what could be a long-term precedent.
“I do think,” predicts Ortmeier, “that there will be others behind us.”
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Hipgnosis Songs Fund’s board of directors said on Monday that it would support a takeover bid from Blackstone if the private equity giant officially files its $1.5 billion offer for the music royalty fund. Blackstone said on Saturday (April 20) in what it called a “possible offer” that it was prepared to bid $1.24 per […]
Private equity giant Blackstone bid $1.5 billion to buy Hipgnosis Songs Fund on Saturday (April 20), marking a significant escalation in the fight for control of the troubled music royalty fund and its collection of rights to songs by Neil Young, Journey, Lindsey Buckingham, Blondie and others.
Blackstone is offering $1.24 per share in an all-cash offer that represents an 8.7% premium over the previous day’s closing share price, and is significantly higher than the $1.4 billion takeover bid that Nashville-based Concord Chorus made for the fund earlier this week.
Blackstone already owns two other entities under the Hipgnosis name — the private music assets investment fund Hipgnosis Songs Capital and the investment advisor Hipgnosis Song Management — and its bid on Saturday showed the private equity behemoth is willing to flex its muscle to maintain assets under the Hipgnosis umbrella.
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The five-year-old, London-listed Hipgnosis Songs Fund has cut its net asset value and shareholder dividends in recent months, as it struggled to address accounting errors and infighting between its board and investment manager that have angered investors already frustrated by an underwhelming stock price.
On Thursday (April 18), the board of directors announced in a filing with the London Stock Exchange that it had agreed to recomment a $1.402 billion proposed takeover bid from Concord to shareholders, which values each Hipgnosis share at £0.93 ($1.14). While the board said that institutional investors representing 30% of the fund’s outstanding shares were on board to vote in favor of the deal with Concord, it still needs shareholder approval from investors holding a total of 75% of shares.
Blackstone’s Hipgnosis Song Management, the investment adviser to the public fund and the private fund (Hipgnosis Songs Capital), has the right to outbid Concord and any other rival bidders to take the fund’s assets private, according to an option in its contract laid out when the fund went public in 2018.
The option was created with the sensitivities unique to music rights in mind. Hipgnosis Songs Fund was founded and built by Merck Mercuriadis, a longtime music executive and manager for artists like Elton John, Beyoncé and Guns N’ Roses. Mercuriadis used his relationships in the music industry to build the fund’s portfolio of rights to hit songs, and this option in the investment advisory contract was designed to give artists confidence that their catalogs would never trade hands — something that famously angered Taylor Swift.
However, since Hipgnosis Songs Fund investors served the board of directors the equivalent of a no-confidence vote last fall, this option has presented hurdles for the board in its effort to secure outside bids for the portfolio.
In its offer, which references Concord’s bid as $1.16 per share due to fluctuations in exchange rates, Blackstone said it “strongly encourages the board of Hipgnosis to recognise the significant increase in value available to all shareholders under the terms of its Fourth Proposal, over the $1.16 as set out in the Concord Offer, and to work with Blackstone to reach agreement on a unanimously recommended Firm Offer in an expeditious manner.”
Live Nation shares fell 10.9% to $89.98 this week after The Wall Street Journal reported the U.S. Department of Justice plans to file a lawsuit against the company in the coming weeks. The DOJ could seek any number of remedies, but, in recent years, there have been calls from both the public and private sectors to break up the company and separate the concert promotion business from the ticketing business.
In February, Senator Amy Klobuchar, who helped organize the Jan. 2023 Senate hearing at which Live Nation president/CFO Joe Berchtold testified, called on lawmakers to “update and enforce antitrust laws” to prevent Live Nation and Ticketmaster from working on concert to “keep ticket prices high.”
“This merger never should have been allowed to happen,” Klobuchar wrote on X in February. “Break them up,” Senator Alexandria Ocasio-Cortez wrote in November 2022 following the Taylor Swift pre-sale fiasco. Likewise, the American Economic Liberties Project and the American Antitrust Institute have both called for the DOJ to break up the company.
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Live Nation shares have fallen 15.1% in the four weeks since the week ended March 22 but remain up 34.3% year to date. The company will report first-quarter earnings on May 2.
The large declines seen among some of the most valuable music companies caused the Billboard Global Music Index to drop 4.5% this week — its largest one-week loss since November 2022. That brought the index’s decline over the past two weeks to 7.5% after it reached an all-time high the week ended April 5.
Major stock indexes also suffered substantial losses this week. The tech-heavy Nasdaq composite fell 5.5% to 15,282.01 as video streaming giant Netflix and chipmaker Nvidia fell 9.1% and 10%, respectively, on Friday (April 19). The S&P 500 dropped 3.0% to 4,967.23. In the United Kingdom, the FTSE 100 fell just 1.2% to 7,895.85. South Korea’s KOSPI composite index lost 3.4% to 2,591.86. China’s Shanghai Composite Index was an outlier, rising 1.5% to 3,065.26.
Radio giant iHeartMedia had the biggest decline of the week after dropping 12.8% to $1.90. That brought the company’s year-to-date loss to 28.8% and its 52-week decline to 54.3%. Music streaming leader Spotify suffered the largest drop in terms of lost market capitalization, however, after an 8.2% decline, to $275.79, raised $4.9 billion of market value. Spotify will release first-quarter earnings on Tuesday (April 23).
Hipgnosis Songs Fund shares predictably surged this week on news that Concord has offered to acquire the company for $1.4 billion, or $1.16 (0.94 pounds) per share. The stock finished the week up 24.2% to 0.919 pounds ($1.14), just under Concord’s offer price. The board encouraged shareholders to accept Concord’s bid, which was a 32.2% premium over the prior day’s closing price. That would provide immediate returns, the board explained, because the company needs “substantial financial and governance changes to improve its financial performance” that will suppress the share price in the meantime.
The other big gainers for the week came from South Korea. HYBE gained 8.2% to 230,500 won ($167.70) and SM Entertainment rose 4.0% to 78,100 won ($56.82). Year to date, HYBE is down 1.3% and SM Entertainment is off 15.2%.
TikTok announced “the ultimate Taylor Swift in-app experience” on Friday (April 19), a way to “connect Swifties with exclusive and first-of-its-kind features.”
TikTok is certainly not the only platform to join with Swift in her promoting her new release, The Tortured Poets Department. Many iHeartRadio stations played the whole album the moment it came out (plus a song from it at the top of every hour), for example, while Spotify launched a three-day “library-themed art installation” to celebrate the album in Los Angeles.
What’s different about TikTok’s announcement: The platform is embroiled in an ongoing licensing dispute with Universal Music Group, Swift’s distribution partner. Because the two sides have been unable to reach an agreement, official recordings from UMG’s artists have (mostly) been removed from TikTok. Swift’s music was absent for a time, but a large chunk of it reappeared on the platform last week.
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Now, not only is the superstar able to circumvent UMG’s TikTok embargo, she is also getting additional promotional help from the platform. “With multiple first-of-its-kind features, fans can dive into the album with playlists to create with, as well as challenges to unlock exclusive artwork for their profiles, and the opportunity to be featured in a Fan Spotlight carousel,” TikTok’s announcement notes.
This is all but guaranteed to make some UMG artists — those who have developed devoted TikTok followings, or had success marketing music on the platform in the past — jealous. “TikTok is mostly used as a new-music discovery tool — discover a clip on TikTok, listen to it on a DSP,” a music lawyer told Billboard last week. “So those who are trying to get their music discovered are the most concerned” about being unable to promote new songs on the app.
Due to that concern, some artists with viral hits are trying to come up with workarounds to allow their songs to remain on TikTok.
Swift’s TikTok partnership, despite the UMG ban, was a display of her power in the music business, as an artist who moves as many units in a year as some entire label divisions. There had been significant speculation about what her return to the service meant — whether it implied a carve out in her contract allowing her to do a direct deal with the social platform, or whether her original contract had always contained such a provision. With today’s news, some of the parameters of that agreement have come more into focus, in terms of the promotion and marketing push that TikTok is providing for the new album.
Warner Chappell Music is moving all of its European online processing to ICE. After a 10-month review, the publisher is expanding its partnership with ICE, a joint venture of GEMA, STIM and PRS for Music that serves as a hub for publishing licensing, collections and payment processing for online uses of compositions in Europe and other markets.
A decade ago, the European Union opened the song-licensing market in Europe to competition by allowing any collective management organization (CMO) to license music for online uses across various markets. In other words, while the German CMO GEMA would maintain its offline monopoly in Germany, for example, it would compete with other CMOs to represent songwriters, publishers and other societies for online uses of their work. In practice, the serious competition takes place between the French CMO SACEM and ICE, a joint venture of GEMA, STIM (Sweden) and PRS for Music (U.K.). Other markets have opened to competition as well, although the U.S. is not one of them.
Universal Music Publishing Group works with SACEM, and ICE also works with Sony Music Publishing through SOLAR, which administers the company’s Anglo-American catalog. Warner Chappell had spread its rights over several different processing companies, but this deal means that all of its business in Europe, as well as some other markets, will go through ICE.
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Although the scope of writer and publisher deals with CMOs vary, this one only involves processing, since Warner Chappell does its own licensing.
“In today’s digital music market, there are vast volumes of data to process, and we need to work with a reliable partner to ensure we’re delivering best-in-class service,” Warner Chappell co-Chair and CEO Guy Moot said in the announcement of the deal. “ICE has always proved to be an innovative and flexible partner, so we’re delighted to expand our relationship with them.”
The deal represents a significant, but not unexpected, win for ICE. “It’s a significant decision and we’re committed to continuing to deliver the best services on the market,” ICE chief commercial officer Ben McEwen said in the announcement. “Specifically in the area of online processing, we have led the way with initiatives such as multi-stage invoicing to maximize claims, alongside many other innovations in matching, reporting and quality assurance.”
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.”