Warner Music gives up on buying the French company Believe

The giant Warner Music Group (WMG) has decided, “after careful consideration, (...) not to present a firm offer” to buy out the French group specializing in music distribution Believe, it announced in a communicated this Saturday April 6. The ad hoc committee, set up by the board of directors of Believe after a first purchase offer by a consortium led by its boss Denis Ladegaillerie, “took note” of this decision, he indicated in a second press release.

This committee “will examine the situation with all interested parties (including the consortium composed of EQT, TCV and Denis Ladegaillerie, as well as the historical shareholders of Believe) in order to determine the next steps relating to the possible evolution of the control of the company, and will inform the market accordingly.

At the beginning of March, the major had indicated its interest in this company specializing in supporting independent artists and labels, founded in 2005 and listed on the stock market in mid-2021. Believe's board of directors had invited WMG to submit a formal offer by April 7. But the union of independent producers and distributors UPFI was worried about the “destructive consequences” of such a takeover on employment and creation.

Unveiled in February, the offer from the consortium of Denis Ladegaillerie and the TCV and EQT funds proposes a buyout at a price of 15 euros per share, valuing the company at around 1.5 billion euros, and the withdrawal of Believe from the stock market. (which was opposed by a shareholder, the asset manager Sycomore AM). But this offer was not made according to the rules, according to the Financial Markets Authority (AMF), which must approve any public purchase offer (OPA) on the Paris financial center.

The consortium had, in fact, given up at the end of February to obtain the reasoned opinion of the board of directors of Believe, saying that the offer is “in the announced interest of the company”.

By waiving this suspensive condition, the consortium, which was aware of the competing offer from WMG, not yet public, “granted itself a decisive advantage in the success of its offer”, estimated the financial markets watchdog. Believe was listed on the stock market at a price of 19.50 euros per share.