Warner Music Group is planning a bid for Believe.
Last month a consortium led by Denis Ladegaillerie, chairman and CEO of Believe, initiated a move to acquire all outstanding shares at €15 per share and take the company private. Believe is currently listed on the Euronext Paris exchange.
The consortium had also agreed to acquire the stakes (at the offer price) of historical shareholders TCV Luxco BD, Ventech and XAnge, representing respectively 41.14%, 12.03% and 6.29% of Believe shares.
However, Warner Music Group has now stepped in by indicating that it would make a higher offer of €17 per share, based on current information.
The company share price for the 2021 IPO was €19.5. Since then it has struggled to maintain that opening level, although Believe's shares hit a two-year high today (March 7) after Warner's expression of interest in acquiring the company.
WMG’s offer would value Believe at around €1.7 billion. The share price closed at €15.52 yesterday, which would give Believe a market capitalisation of €1.6bn
Believe was founded in 2005 by Denis Ladegaillerie. It posted a strong performance in 2023, including organic growth of 14%.
The company has around 2,000 staff in 50 countries. Its portfolio of brands covering services for the music industry includes Believe, TuneCore, Nuclear Blast, Naïve, Groove Attack, AllPoints, Ishtar and Byond.
In a statement, WMG said its approach was made to the company on a confidential, exploratory and non-binding basis. It has requested access to a limited list of key due diligence information.
“WMG reaffirms its interest in the potential transaction and considers that such a combination would be beneficial to the company and all of its other stakeholders (shareholders, employees, artists and labels),” added the statement.
The incorporation of Believe into the Warner Music family would bolster its artist & label services operation, alongside the major’s global ADA division. It would also provide Believe with an opportunity for global expansion backed by WMG.
“As opposed to the purely financial transaction contemplated by the consortium formed by EQT, TCV, and Denis Ladegaillerie announced on February 12, 2024, WMG would provide Believe with strategic support and financial stability to help the development and growth of the company, including by accelerating its expansion into new geographies,” said the statement. “In addition, WMG envisages financial terms that would be more attractive than those announced by the consortium.”
The transaction could be for cash only, without WMG excluding the possibility of a share component, and without any financing conditions. The major said that the filing of the offer could be subject to obtaining authorisations from relevant competition authorities.
Concluding its statement, WMG said it will keep the market updated on any further material developments relating to the potential offer for Believe.
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