Top South African Investors May Be Eyeing Takeover of French Digital Music Company, Insiders Say

The largest shareholders of Believe, a French music services company, are reportedly considering taking the company private, according to sources familiar with the matter. These investors include the company's CEO and founder, Denis Ladegaillerie, and U.S. investment firm TCV.

Believe, which is known for supporting best-selling French artists such as the rap duo PNL, has been on the public market for less than three years. Yet, its shareholders have been gauging interest from private equity firms for a possible takeover bid.

The company's stakeholders have been working with advisors on this potential move. Swedish private equity group EQT and Permira are known to have held discussions with the shareholders, although these talks ended last month. Despite this, takeover discussions are still ongoing, albeit without any certainty that a deal will materialize.

The Paris-based Believe has a market capitalization of 948 million euros ($1.04 billion). Ladegaillerie holds a 12.4% stake in the company, while TCV owns 41.1%.

News of these discussions led to a surge in Believe's share price, which spiked by almost 6% to 10.30 euros in early trade last Friday. However, it later pared these gains, with shares up 1.2% at 0835 GMT.

This potential move by Believe's shareholders is not an isolated incident. In the past year, several transactions in Europe have seen shareholders buy back public companies struggling to perform on the stock exchange. For instance, EQT made an offer in August to buy outstanding shares in Suse, a German software group in which it owned a 79% stake.

Believe's shares closed at 9.74 euros on Thursday, a significant drop from its initial public offering price, reflecting a decline of about 50%.

Founded by Ladegaillerie in 2005, Believe collaborates with musicians and music labels to help build their brand through social media and promote their work on streaming music platforms. It primarily targets lesser-known singers outside the top global stars.

Despite the ongoing discussions, TCV has declined to comment, and Ladegaillerie did not respond to multiple requests for comment. A spokesperson for Believe also had no immediate comment.

In conclusion, while the future of Believe remains uncertain, its shareholders are actively exploring options to potentially enhance the company's value and performance.