Believe Buyer Led by Denis Ladegaillerie Holds 95% of Shares After Tender Offer

The consortium acquiring French music company Believe increased its holdings to 94.99% of share equity at the conclusion of the tender offer, the company announced Monday (June 25). That marks a nearly 10% increase from the 85.04% of shares the consortium held a week earlier.

Led by CEO Denis Ladegaillerie, who founded Believe in 2005 to take advantage of the rapidly evolving digital music business, the consortium purchased 19.6 million shares at 15.00 euros ($16.10) per share during the offer, which ran from June 3 to June 21. Combined with blocks of shares previously acquired from investors, the consortium now holds 95.6 million of the 100.7 million shares outstanding. The free float — shares owned by minority investors — is 5.01%. The consortium, which also includes major shareholders EQT and TCV, commands 106.5 million of 113 million — 94.29% — of Believe’s voting rights.

While the consortium does not plan on executing a mandatory squeeze-out for shares not tendered by minority shareholders, because the free float — shares not held by insiders that can be publicly traded — has fallen under 15%, Believe will be de-listed from some stock indexes. 

Also on Monday, Believe announced the appointment of Andrew Fisher, a new director representing EQT, after venture capital firm Ventech sold its shares to the consortium and lost a director. Fisher’s ratification will go to a vote in the 2024 annual general meeting. The board additionally appointed two observers: Michael Kalfayan, general partner at TCV, and Nicolas Brugère, partner at EQT.

The consortium announced a takeover bid for Believe in February at 15.00 euros ($16.10), which represented a 21% premium over the prior closing price. According to an offer document, the consortium wants to take over the company “so that it can better execute on its value-creation plan and accelerate the scale-up of an independent player supporting artists and label clients” and “further grow and consolidate its position as a leader in the French and European markets.”

After the Believe board of directors backed the takeover bid on April 19, the consortium purchased a large block of shares from venture capital firms XAnge and Ventech. Before the acquisitions, TCV was the biggest shareholder with 41.1% of share capital, while Ladegaillerie owned 12.5%, private equity firm Ventech owned 12.0%, XAnge owned 6.3% and roughly 3.8% of shares were held by a strategic holding fund and in treasury shares. Free float was 24.4%. 

Warner Music Group briefly looked at acquiring Believe in March and estimated a bid of “at least” 17 euros ($18.24) per share, which would have valued the company at 1.65 billion euros ($1.8 billion). But the pursuit was short-lived; Warner dropped out of the running in April.