In a narrative already crammed with twists and turns, we’ve arrived at one other main second within the battle to (doubtlessly) purchase Consider.
Earlier this month, MBW reported that the Autorité des Marchés Financiers (AMF), France’s equal to the Securities and Alternate Fee within the US, had been dragged into this saga.
Consider’s board turned to the AMF to adjudicate whether or not a specific transfer by a consortium led by Consider founder/CEO, Denis Ladegaillerie, was lawful.
That call is now right here, with the AMF declaring that an try by the Ladegaillerie consortium to “waive” a beforehand agreed situation of its bid “infringes the guiding rules of public bid legislation” in France – “specifically the rules of equity, transparency and the free play of bids and overbids”.
These are the (translated) phrases of Marie-Anne Barbat-Layani, Chair of the AMF, in a letter to Consider’s board despatched previously 24 hours and obtained by MBW.
Why is that this so essential?
As a result of if the Ladegaillerie consortium is/was in a position to “waive” the situation, it could all-but-guarantee its acquisition of round 72% of Consider (for starters).
That 72% acquisition, if it went forward, would basically finish any risk of a takeover of Consider by Warner Music Group. WMG is thought to be contemplating whether or not to make a rival provide to purchase the French firm at the next value than the Ladegaillerie bid.
Ergo, the AMF’s resolution would appear to maintain alive Warner’s probabilities of formally getting into a bidding course of for Consider.
How we bought right here – and why the AMF says a Ladegaillerie ‘waiver’ can be in ‘violation of the rules of equity’
On February 12, Consider introduced that the Ladegaillerie consortium – made up of Ladegaillerie, TCV, and EQT – had privately agreed offers for the acquisition of 71.92% of the corporate.
This 71.92% block of fairness is presently held by 4 shareholders: Ventch and Xange, plus TCV and Denis Ladegaillerie himself.
Consider mentioned that this Ladegaillerie takeover of 71.92% can be topic to 2 circumstances: (i) Regulatory approval in France; and (ii) the issuance to Consider shareholders of the board’s approval of Ladegaillerie’s bid, aka a “equity opinion” knowledgeable by a report from impartial consultants.
On February 21, Consider’s board acquired a non-public expression of potential curiosity in shopping for the corporate from Warner Music Group.
Then, on February 27, WMG informed Consider that it was contemplating making a takeover provide for Consider at a materially larger worth than the Ladegaillerie bid. (WMG’s potential bid would worth Consider at round USD $1.8 billion or extra, Warner revealed; Ladegaillerie and co’s bid values the corporate at round USD $1.6 billion.)
The subsequent day (February 28), the Ladegaillerie consortium introduced its intention to “waive” one in all these previously-announced circumstances for its 71.92% ‘Block Acquisitions’ – the one requiring the Consider board to challenge an approval of the bid to shareholders (aka the “equity opinion”). This could prospectively have accelerated the Ladegaillerie consortium’s takeover of the 71.92% stake.
Nonetheless, Consider’s board then consulted with the AMF to assist it resolve whether or not or not Ladegaillerie’s “waiver” try was legally sound.
“By exercising… its proper to unilaterally waive the mentioned situation precedent… when WMG had made recognized an expression of curiosity valuing Consider at not less than 17 euros per share, the consortium, which was conscious of this non public data, granted itself a decisive benefit within the success of its bid, in violation of the rules of equity, transparency and the free play of bids and overbids.”
Marie-Anne Barbat-Layani, AMF
In her letter to Consider’s board revealed yesterday (March 22), the AMF’s Marie-Anne Barbat-Layani wrote that the previously-agreed circumstances of the Ladegaillerie consortium’s strategy meant that “the execution of the sale agreements [are] depending on the favorable opinion of [Believe’s] board of administrators”. She referred to as this “a necessary regulatory stage within the progress of a public provide”.
Barbat-Layani asserted that, by trying to “waive” the board approval situation after Warner Music Group had privately made recognized an expression of curiosity in doubtlessly bidding for Consider at a specific value (€17-per-share or above), “the [Ladegaillerie] consortium, which was conscious of this nonpublic data, granted itself a decisive benefit within the success of its bid, in violation of the rules of equity, transparency and the free play of bids and overbids”.
Whereas it was consulting with the AMF over the “waiver” try by the Ladegaillerie consortium, Consider’s board placed on ice a request from WMG to overview “confidential” monetary materials about Consider.
With the AMF’s overview of the “waiver” now full, we await information on when/whether or not WMG will get its fingers on this “confidential data”.Music Enterprise Worldwide
