Believe’s Board Invites Warner Music Group to Make Them an Offer

Believe’s board of directors on Monday (March 25) asked Warner Music Group (WMG) to submit a formal bid for the French music company after stating that French financial regulators found an offer by a group that includes Believe CEO Denis Ladegaillerie violated certain securities rules.

WMG said earlier this month that it approached Believe in February with a non-binding offer to combine the two companies at a price of “at least” 17 euros ($18.60) per share. It now has until April 7 to “submit a binding, unconditional and fully financed offer,” according to a statement from Believe’s board.

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Soliciting a take-over bid to compete with an offer by the company’s own chief executive is uncommon and signals an escalation in the fight for control of Believe. In its statement, Believe’s board said the bid from Ladegaillerie and investment firms EQT X and TCV was “not compliant with the rules governing tender offers.”

Ladegaillerie and the investors had offered to take Believe private at a price of 15 euros per share — or roughly 1.523 billion euros ($1.64 billion) for the company. Upon learning of WMG’s approach, the consortium tried to speed up the acquisition process by waiving a condition that the board’s ad hoc committee receive an independent expert report into the financial fairness of their offer. A review by the French financial regulatory body, Autorité des marchés financiers (AMF), stated the group could not waive this condition.

“The Board must permit…that all shareholders of Believe have the option to take advantage of the best possible offer, to the extent such offer is reasonably likely to be successful,” the board said in a statement earlier this month.

Believe owns a large label services business, digital distributor TuneCore, publishing administration service Sentric and a stable of record labels including Naïve, Nuclear Blast and Groove Attack. The company’s business model is built around helping to develop artists and using digital marketing and distribution to impact local charts. In 2023, the company posted revenue of 880.3 million euros ($952.8 million at the average exchange rate), up 15.7% from the prior year helped by geographical expansion and strong streaming growth.

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