Does Believe Go Private? Consortium led by Denis Ladegaillerie launches takeover bid

Believe founder and CEO Denis Ladegaillerie has formed a joint venture with investment funds EQT and TCV as part of a wider effort to take full ownership of the French music company and take it private. The trio announced their intentions on Monday (February 12) and Believe's board voted unanimously in favor of the review proposal.

In total, the offer values ​​Believe's total share capital at €1.523 billion (US$1.64 billion) based on 101.547 million shares outstanding.

To be able to take Believe private, Ladegaillerie, EQT and TCV must first acquire shares owned by TCV's historical shareholders Luxco BD S.à rl, XAnge and Ventech, which together amount to 59.46% of the share capital. Following this already agreed transaction, Ladegaillerie would then contribute a portion of his company's shares, representing an additional 11.7%, to the bidding group, as well as sell the remaining 1.29% stake. An additional 3% has been taken by other shareholders, bringing this group's stake in the company to around 75%.

Once these acquisitions are approved by regulators, the conglomerate will then tender all Believe shares at an offer price of €15 per share, representing a 21% premium to the last closing price prior to the announcement of proposed acquisition (12.4 euros on February 9). If the legal conditions are met at the end of the offer, the company will then request a squeeze-out process.

Completion of the block share buybacks is expected to take place in the second quarter of 2024, and the next auction filing will be sent to the Autorité des marchés financiers (AMF), which regulates the stock market in France, soon after.

The French digital music company, which owns TuneCore, began trading on the Euronext Paris exchange in June 2021.

Believe's board appointed an independent expert, Ledouble, to prepare an opinion on the offer and assigned three board members to assist in that effort and to develop their own recommendations for shareholders and employees.

In prepared comments, Ladegaillerie said Believe “has systematically exceeded its targets, delivering its IPO plan two years ahead of schedule,” but “the strength of its operating performance is not reflected in its share price performance.”

He added, “Believe has a significant opportunity ahead to consolidate the independent music market and create the world's first major independent, serving artists at all stages of their careers. To achieve this ambition, I am delighted to continue to benefit from the active support of TCV which has been with Believe since 2014 and to work with EQT based in Europe, which has a great track record of supporting high growth companies.”

Believe has appointed Citigroup Global Markets Europe AG and Gide Loyrette Nouel as financial and legal advisors to assist the company and the three-member committee in evaluating the offer.