How Do You Say ‘Green Light’ In French? EQT-Led Consortium Acquiring Majority 72% Stake in Believe Following Board Approval, Launching Public Offer on Outstanding Shares

An investment consortium spearheaded by EQT, alongside Believe’s longtime investor TCV and company CEO and founder Denis Ladegaillerie, is now securing a controlling stake of nearly 72% in digital music distributor Believe. The acquisition go-ahead follows a ringing endorsement from Believe’s Board of Directors, signaling full confidence in the deal.

According to details shared late Thursday (April 18th) with Digital Music News, the consortium will soon launch a simplified public purchase offer for Believe’s remaining outstanding shares, valuing them at €15 per share. This marks a significant premium of 43.8% compared to the average stock price over the last 30 days, providing an attractive exit opportunity for existing shareholders.

As for the broader acquisition, the investment consortium now has a strong green light and will proceed within a matter of days. “All conditions… have been definitively fulfilled and the transfer of these shares is firm and irrevocable,” the parties relayed in a statement.

The board further noted that the consortium’s vision aligns with Believe’s mission to empower independent artists and labels. EQT and TCV are committed to fueling Believe’s expansion, investing heavily in technological advancements and strategic acquisitions to drive growth that outpaces the broader market.

“Believe is a world leader in the digital music market, with strong French roots and a powerful ambition to be the essential partner for independent artists and labels globally,” Denis Ladegaillerie, CEO and founder of Believe, relayed in the email.

“This operation, along with the continued backing of TCV and the expertise of EQT, will bolster our remarkable growth trajectory. We are confident this will cement our position as the global reference for independent music, allowing us to seize the vast opportunities presented by the ongoing digital transformation of the music industry.”

In a separate release emailed to Digital Music News, Believe’s Board of Directors unanimously issued a favorable opinion on the offer, emphasizing its belief that the offer aligns with the interests of the company, its employees, and its shareholders.

Specifically, the email detailed several reasons for the nod, including benefits for minority shareholders, an option for long-term investment, and the investors’ alignment on Believe’s broader mission.

“In particular, the Board of Directors considered that the Offer is in the interests of minority shareholders wishing to realize their investment, by enabling them to benefit from immediate and full liquidity at a significant premium over the relevant stock price averages, and at the same price as that obtained by the sellers of majority blocks, and thus recommended that minority shareholders pursuing this objective tender their shares to the Offer,” the email detailed.

Earlier this month, Warner Music Group (WMG) decided not to pursue the acquisition of Believe after months of negotiations between the two companies.

The decision followed concerns from independent music organizations that a WMG-Believe merger would stifle competition in the industry.

In a press release issued by the major label, WMG confirmed that “after careful consideration, it has decided not to submit a binding offer for Believe.” The statement continues: “WMG thanks the Ad Hoc Committee and Believe’s leadership team for their time and cooperation, and wishes the company every success in future.”

The deal comes at a confusing juncture for the music industry in France.

The good news is that the French music industry has been experiencing steady growth for the past seven years, and even physical media sales are holding strong. However, there are also some challenges on the horizon.

Digital sales are lagging behind other countries, and subscription growth for streaming services is slowing down. The French industry body SNEP points to competition from short-form video platforms and tax hikes on streaming services as reasons for the slowdown.

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