The consortium acquiring French music company Believe has acquired 85.04% of share capital and 73.27% of voting rights in a tender offer that ends Friday (June 21). Believe owns digital distributor TuneCore, publishing administration service Sentric and such record labels as Naive, Nuclear Blast and Groove Attack.
The bidding company is a consortium led by Believe CEO Denis Ladegaillerie and two of its major shareholders, EQT and TCV. The consortium announced a takeover bid in February at 15.00 euros ($16.10), a 21% premium over the prior closing price. It wants to take over Believe “so that it can better execute on its value-creation plan and accelerate the scale-up of an independent player supporting artists and label clients,” according to an offer document. With control of Believe, the bidders hope to “further grow and consolidate its position as leader in the French and European markets.”
Warner Music Group was briefly interested in acquiring Believe in March and estimated a bid of “at least” 17 euros ($18.24) per share, which would have valued Believe at 1.65 billion euros ($1.8 billion). The pursuit was short-lived, however, and Warner dropped out of the running in April.
Believe shares may continue to trade on the Euronext Paris exchange once the tender offer results are published on June 25. The consortium does not plan on implementing a mandatory squeeze-out for shares not tendered by minority shareholders. But because the free float — shares not held by insiders that can be publicly traded — has fallen below 15%, Believe will be de-listed from some stock indexes.
Following the Believe board of directors’ meeting on April 18, the consortium acquired a large block of shares from venture capital firms XAnge and Ventech. Prior to the acquisitions, TCV was the largest shareholder with 41.1% of share capital, while Ladegaillerie owned 12.5%, private equity firm Ventech owned 12.0%, XAnge owned 6.3% and roughly 3.8% of shares were held by a strategic holding fund and in treasury shares. Free float was 24.4%.