Last month, reports indicated that Believe, having listed on the Euronext about three years back, was exploring a potential deal to go private. Now, the Paris-based music company has received an offer that will seemingly set the stage for its exit from the public market.
Believe (Euronext: BLV) reached out to Digital Music News today with word of the proposal, attributable specifically to a consortium consisting of founder and CEO Denis Ladegaillerie, Menlo Park-headquartered investment firm TCV, and Stockholm’s EQT Partners.
As described by the corresponding release, the deal would see this consortium pay €15 per share, a modest boost from the €12.40 that BLV was fetching at the time of writing and an even bigger jump from its average price across the past month of trading.
Running with the per-share offer price, the consortium is said to have finalized agreements to purchase the BLV holdings of existing stakeholders TCV Luxco BD S.à r.l., Ventech, and XAnge. These deals extend to a total of almost 60 percent of Believe shares, with Ladegaillerie prepared to put up another 11.17 percent (besides selling an extra 1.29 percent yet) for the consortium.
Along with commitments from different investors to part with three percent of Believe shares, the consortium would then possess nearly 75 percent of the company (and 77.42 percent of voting rights). That scenario would lay the groundwork for “a mandatory tender offer for the remaining Believe shares” at the €15 offer price, “with a view to take the company private should the consortium reach the levels to implement a squeeze-out,” per the text.
On the approval front, Believe’s board “favorably welcomes the proposal.” However, the company’s three independent directors – those aside from Ladegaillerie and individuals tied to the consortium and/or the entities from which it intends to buy the shares – are expected to review a forthcoming report, penned by “independent expert” Ledouble, about the offer.
With the three board members’ formal post-report approval (which, needless to say, appears likely), the described block acquisition of the majority of Believe’s shares would be followed by the tender offer during 2024’s second quarter, according to the release. Of course, the overarching move is further dependent on necessary regulatory signoffs.
Looking ahead to the remainder of the 2023 fiscal year, Believe also took the opportunity to reiterate a forecast including 14 percent organic growth and adjusted EBITDA of “slightly above” 5.5 percent. January saw the business acquire the catalog of “Punjabi powerhouse” White Hill Music, before launching a hip-hop-focused imprint called Playcode in Japan last week.