Warner Music Group announced over the weekend that it has called off plans to submit a binding offer to acquire French music company Believe. The label did not elaborate on its decision, only that it was made “after careful consideration.”
Believe followed up in a statement, saying it will “review the situation with all interested parties (including the consortium) to determine next steps in relation to the possible evolution of the company’s control.”
The shift arrives less than two weeks after Believe’s board of directors gave WMG the green light — and access to financial data — to make a formal bid for the company, which owns digital distributor TuneCore, publishing administration service Sentric and a stable of record labels including Naïve, Nuclear Blast and Groove Attack.
WMG said earlier that it approached Believe in February with a non-binding offer to combine the two companies at a price of “at least” 17 euros ($18.60) per share. Believe then gave WMG until Sunday, April 7 to “submit a binding, unconditional and fully financed offer.” Warner dropped out a day before the deadline.
Warner argued in March that its offer was more attractive than a rival takeover bid from Believe founder and CEO Denis Ladegaillerie and a consortium of shareholders, which had offered 15 euros per share and was backed by the board of directors.
Upon learning of WMG’s interest in Believe, the consortium tried to speed up the acquisition process by waiving a condition that the board’s ad hoc committee receive an independent expert report into the financial fairness of their offer. A review by the French financial regulatory body, Autorité des marchés financiers (AMF), stated the group could not waive this condition.
