(BFM Bourse) – The music major declared in a press release published on Saturday that it would ultimately not make an offer for the French digital music specialist. Which a priori leaves the field open to the consortium led by the founder of the group to delist the company.
There will be no Homeric battle over the takeover of Believe. The French specialist in digital music (it offers various services to artists and labels, such as distribution on digital platforms, revenue collection tools, performance analysis of music catalogs or financial support) has is the subject of two competing marks of interest.
On the one hand, a consortium led by the founder of Believe, Denis Ladegaillerie, announced in February a public purchase offer at 15 euros per share, following a project to acquire a block of shares which will allow them to acquire 70% of the capital. On the other hand, the music major Warner Music Group expressed its interest in Believe a few days later. The American company had contacted the company with a view to a merger and indicated that it thought it would value it at at least 17 euros per share.
The American group had also asked Believe for access to essential information to establish audits and verifications (“due diligence”) prior to the launch of a public purchase offer (OPA). Warner Music had access to this information at the end of March via access to a “data room” opened by Believe.
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A falling price
It is believed that further examination of this information led Warner Music to backtrack.
In a brief press release, the American group announced that it would ultimately not make an offer for Believe. “Warner Music Group Corp announced today that after careful consideration, it (had) decided not to present a binding offer for Believe,” more precisely declared the American group on Saturday.
Without too much surprise, this announcement weighs down the Believe share which dropped 9.7% around 10:20 a.m. to settle at 14.90 euros, almost at the level of the takeover price of the consortium led by Denis Ladegaillerie. During the last sessions, the action had come closer to 17 euros per share, that is to say the minimum price mentioned by Warner Music Group, because the market had started to hope for a stock market battle or even a war auction between the two parties.
In a note published in mid-March, the Stifel bank estimated that Warner could increase the buyout price to 20 euros per share, once its audits were carried out, so as to discourage the consortium.
But that won’t happen now that Warner Music has pulled out of the race. “This withdrawal by Warner therefore leaves the door wide open to the consortium led by Denis Ladegaillerie and the EQT and TCV funds which have submitted an offer at 15 euros per share,” underlines Invest Securities. “Unless”, adds the company, “a new suitor declares itself”, adds the design office.
The price of 15 euros per security proposed by the consortium, much lower than Believe’s IPO price of June 2021 (19.5 euros), was criticized by several market specialists. The investment company Sycomore AM, for example, judged this offer “too weak”, demanding at least that the price be based on the 2021 introductory price. Sycomore AM had logically encouraged Believe shareholders not to tender their shares. to the offer.
Julien Marion – ©2024 BFM Bourse
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