Warner kicks off bidding war for French music group Believe

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

A bidding war has emerged for French digital music company Believe after Warner Music Group said it planned to make an offer to buy the company for at least 17 euros a share, more than a recent proposal from its founder and chief executive.

The potential rival offer from US-based Warner, which would value the company at €1.65bn, comes less than a month after Denis Ladegaillerie, alongside private equity groups EQT and TCV, proposed to take the company private at €15 per share. 

The offers come less than three years after Believe first listed in Paris, but shares have traded significantly below the price at its initial public offering for most of that period. They have gained in recent weeks since the potential delisting was announced, closer to its listing price at €16 a share and giving it a market value of €1.56bn.

Shares rose as much as 6 per cent on Thursday after Warner’s potential offer was disclosed.

Warner, the third-largest music group after Universal and Sony, said the approach was preliminary and non-binding, and that it had asked for a limited amount of information to conduct due diligence with a view to submitting a formal offer. Although a decision has yet to be made, Warner said the offer could be in cash. 

“As opposed to the purely financial transaction contemplated by the consortium formed by EQT, TCV, and Denis Ladegaillerie . . . Warner Music would provide Believe with strategic support and financial stability to help the development and growth of the company,” Warner said in a statement, adding that this could include speeding up Believe’s expansion into new markets. 

The consortium of Ladegaillerie and the private equity groups has said that it already has agreements in place to acquire 72 per cent of the French group’s share capital from existing shareholders and that the offer is backed by…