The Ad-Hoc Committee has seized the AMF following Warner Music
Group’s proposal and the consortium’s waiver of the condition
precedent related to the favorable opinion of the Believe board of
directors
The Ad-Hoc Committee has seized the AMF
following Warner Music Group’s proposal and the consortium’s waiver
of the condition precedent related to the favorable opinion of the
Believe board of directors
Paris, 11 March 2024 – On 12
February 2024, a consortium formed by the EQT X fund, funds advised
by TCV, and Mr Denis Ladegaillerie, acting through a dedicated
entity (“BidCo”) has indicated to the Company that it would launch
a tender offer (the “Offer”) on the shares of Believe (the
“Company”) at a price per share of 15 euros, following the
acquisition of blocks representing 71.92% of the share capital and
77.42% of the theoretical voting rights of the Company (the “Block
Acquisitions”).
In its binding proposal to the Board of
Directors of the Company (the “Board”) , BidCo provided that the
Blocks Acquisitions and the ensuing Offer would be only subject to
two conditions1: (i) obtaining the necessary regulatory approvals
(the “Regulatory Condition”); and (ii) the Board of Directors of
Believe giving its unqualified positive recommendation of the
Offer, notably following issuance of the independent expert report
relating to the Offer stating that the take private Offer is fair
from a financial standpoint, and consultation of the social and
economic committee of Believe (the “Board Condition”). BidCo’s
binding proposal to the Board did not mention that those conditions
could be waived.
On 21 February 2024 Warner Music group (“WMG”)
approached the Company to initiate discussions with respect to a
potential combination of Believe with WMG and to obtain access to
confidential information with a view to possibly making a more
attractive offer to the Company and its shareholders. The Ad-Hoc
Committee, seeking to assess whether WMG’s proposal could
constitute an alternative to the Bidco offer on improved financial
terms, asked WMG for certain clarification.
WMG indicated to the directors of Believe on
February 27, 2024 that, at this stage, it could value Believe at a
price of at least €17/share (coupon attached) based on currently
available public information, restating that at this stage its
approach did not constitute an offer or constitute any obligation
to make an offer, nor did it evidence an intention to make an
offer.
Following WMG’s approach, BidCo informed the
Board of Directors of the Company on 28 February 2024 of its
unilateral right to waive the Board Condition under the contracts
for the Blocks Acquisition; and of its decision to waive such
Condition. BidCo further indicated to the Board that, consequently,
the Block Acquisitions remained subject only to the Regulatory
Condition (relating to anti-trust clearances), which BidCo expected
to obtain in a short timeframe.
In a press release of 7 March 2024, WMG
reiterated its expression of interest publicly. In this press
release, WMG indicated that it was awaiting access to certain due
diligence information identified to the Company to confirm its
indicative price of at least 17 euros per share (coupon attached).
In this press release, WMG also noted that, in its view, the waiver
was contrary to French tender rules and that the validity of the
waiver of the Board Condition could be challenged.
In turn, the Consortium issued a press release
on 8 March 2024 indicating that, in its view, its decision to waive
the Board Condition is perfectly valid and has been done in full
compliance with French regulations. The Consortium confirmed that
it will, after completion of the Blocks Acquisition, file a
mandatory tender offer to acquire the remaining 28% free float at
the same price of €15 paid to the selling shareholders of the
blocks as required by French tender offer regulation.
The Ad-Hoc Committee notes that, following the
waiver of the Board Condition, the completion of the Block
Acquisitions would put BidCo in a position of majority control of
Believe, regardless of the opinion of the board and of the report
of the independent expert.
This situation, unless considered legally
invalid, would prevent a competing bidder from acquiring
control2.
The Ad-Hoc Committee considers that it is the
duty of the Board of Directors to ensure that the process around
the transfer of majority control and the resulting offer take place
in accordance with applicable rules. The Board must also permit,
including by giving access to information in a fair manner, that
all shareholders of Believe have the option to take advantage of
the best possible offer, to the extent such offer is reasonably
likely to be successful (including in view of validly existing
agreements among shareholders).In view of differing views on the
validity of the waiver of the Board Condition3, the Ad-hoc
Committee has seized the “Autorité des marchés financiers”
(“AMF”).
In this request, the Ad-Hoc Committee has asked
the AMF whether (i) BidCo was able, in the prevailing
circumstances, to waive freely and unilaterally, the Board
Condition, since it had the power to do so in its contracts with
the sellers of the Blocks, or whether, (ii) in view of the initial
Board Condition and of a third party preliminary proposal at a
potentially higher price, the principles of tender offers,
including the principle of free confrontation of offers and
competing offers, prevented such waiver of the Board Condition.
In view of these circumstances, the Ad-hoc
Committee has decided not to engage, at this stage, in WMG’s
request to have access to certain confidential information, pending
clarification by the AMF.
The Ad-Hoc Committee will continue to perform
its mission and keep the market informed in accordance with
applicable rules.
*****
About BelieveBelieve is one of
the world’s leading digital music companies. Believe’s mission is
to develop independent artists and labels in the digital world by
providing them the solutions they need to grow their audience at
each stage of their career and development. Believe’s passionate
team of digital music experts around the world leverages the
Group’s global technology platform to advise artists and labels,
distribute and promote their music. Its 1,919 employees in more
than 50 countries aim to support independent artists and labels
with a unique digital expertise, respect, fairness and
transparency. Believe offers its various solutions through a
portfolio of brands including Believe, TuneCore, Nuclear Blast,
Naïve, Groove Attack, AllPoints, Ishtar and Byond. Believe is
listed on compartment B of the regulated market of Euronext Paris
(Ticker: BLV, ISIN: FR0014003FE9). www.believe.com
Forward Looking statement This
press release contains forward-looking statements regarding the
prospects and growth strategies of Believe and its subsidiaries
(the “Group”). These statements include statements relating to the
Group’s intentions, strategies, growth prospects, and trends in its
results of operations, financial situation and liquidity. Although
such statements are based on data, assumptions and estimates that
the Group considers reasonable, they are subject to numerous risks
and uncertainties and actual results could differ from those
anticipated in such statements due to a variety of factors,
including those discussed in the Group’s filings with the French
Autorité des Marchés Financiers (AMF) which are available on the
website of Believe (www.believe.com). Prospective information
contained in this press release is given only as of the date
hereof. Other than as required by law, the Group expressly
disclaims any obligation to update its forward-looking statements
in light of new information or future developments. Some of the
financial information contained in this press release is not IFRS
(International Financial Reporting Standards) accounting
measures.
Press contacts:believe@brunswickgroup.com Hugues
Boëton |+33 6 79 99 27 15 Benoit Grange |+33 6 14 45 09
26 |
Investor Relations
contact:Emilie.megel@believe.comEmilie MEGEL| +33 6 07 09
98 60 |
1 There was a third condition that no law, nor any order or
injunction in effect that prohibits the closing of the acquisitions
(in any case, by law, no contract can be performed if the
performance is prohibited by law or judgment).
2 Unless BidCo were to resell its controlling interest to the
competing bidder.
3 As previously noted, Bidco has reaffirmed its
valid unilateral right to waive the Board condition, while WMG
considers the waiver of the Board Condition to be contrary to
French offer rules.
- Press release - Believe - AdHoc committee-on
access-11.03.2024
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