EQT Consortium Plows Ahead With Believe Privatization Plan — As the Board Reveals Third-Party Rumblings of a Superior Offer

Photo Credit: French Tech Journal

Last month, a consortium featuring Denis Ladegaillerie, EQT Partners, and TCV revealed plans to take Believe private with a roughly $1.6 billion bid. Now, with the consortium moving toward a deal, Believe’s board says a third party might be interested in paying more for the business.This unexpected development came to light today, in a formal release put out by a Believe “ad-hoc committee” – consisting of the three board members who don’t have an interest in the companies behind the privatization effort, that is.

As we reported in mid-February, the mentioned consortium said it’d finalized agreements to purchase about 60 percent of the digital music company’s stock (BLV on the Euronext) from large stakeholders at €15 per share.

With Ladegaillerie pitching in another 12.5 percent or so of outstanding BLV shares, the consortium, possessing a clear-cut voting-rights majority, would then proceed to make “a mandatory tender offer for the remaining Believe shares” at €15 a pop, it was disclosed.

At the time of said disclosure, €15 per share represented a healthy boost from BLV’s €12.40 value – and especially its 52-week low of €7.70. But as initially highlighted, the ad-hoc board committee has “received a confidential exploratory non-binding approach from an interested party seeking to obtain access to confidential information and to engage into a dialog with a view to possibly making a more attractive offer.”

That offer “could value Believe shares at least at 17 euro per share,” according to the release – or about $210 million more than the consortium’s offer when factoring based on Believe’s outstanding shares and the present euro-dollar exchange rate.The potential third-party buyer indicated also “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,” per the non-committal text.

“The Ad-Hoc Committee will examine with the interested party whether such party envisages further steps,” the board members spelled out for good measure.

Significantly, Believe’s stock price at the time of this writing, €15.52 per share, had spiked above the price point associated with the consortium’s offer. While it remains to be seen exactly what the point means for the privatization objectives (even after its present deal wraps, the consortium will still have to secure the remaining one-quarter of the company), the ad-hoc committee appears to have signaled that the consortium is expediting its takeover attempt.

Specifically, the consortium told the board on February 28th “of its decision to waive the Board Condition” – or the board’s official recommendation on the takeover following the issuance of an “independent expert report,” according to the release. As a result, the consortium’s above-described block acquisitions remain “subject only to” antitrust agencies’ approval, as outlined by the text. The bidding parties expect to receive the required regulatory signoff “in a short timeframe.”