The consortium buying French music label Believe acquired 85.04% of the shares and 73.27% of the voting rights in an auction ending on Friday (21 June). Believe has digital distributor TuneCore, publishing management service Sentric and labels including Naive, Nuclear Blast and Groove Attack.
The offering company is a joint venture led by the CEO of Believe Denis Ladegaillerie and two of its main shareholders, EQT and TCV. The consortium announced a takeover offer in February at 15.00 euros ($16.10), a 21% premium over its previous closing price. It wants to take over Believe “so it can better execute its value creation plan and accelerate the scaling of an independent player supporting artists and label clients,” according to an offer document. By taking control of Believe, the bidders hope to “further develop and consolidate its position as a leader in the French and European market”.
Warner Music Group was briefly interested in buying Believe in March and estimated an offer of “at least” 17 euros ($18.24) per share, which would have valued Believe at 1.65 billion euros ($1.8 billion dollars). 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 stock exchange once the results of the June 25 auction are published. The consortium does not intend to implement a mandatory buy-back for shares not tendered by minority shareholders. But because the free float – shares not held by individuals that can be traded publicly – has fallen below 15%, Believe will be delisted from some stock indices.
After Believe's board of directors endorsed the takeover bid on April 19, the consortium acquired a large stake from venture capital firms XAnge and Ventech. Before the acquisitions, TCV was the largest shareholder with 41.1% of the share capital, while Ladegaillerie held 12.5%, private equity firm Ventech held 12.0%, XAnge held 6.3% and about 3.8% of the shares were held by a strategic holding fund and in own shares. Free dispersion was 24.4%.
