In a statement issued today Warner Music Group says that "after careful consideration, it has decided not to submit a binding offer for Believe".

The full statement reads: "April 6, 2024 - Warner Music Group Corp (“WMG”) announced today that, after careful consideration, it has decided not to submit a binding offer for Believe. WMG thanks the Ad Hoc Committee and Believe's leadership team for their time and cooperation, and wishes the company every success in future".

As CMU previously reported, it seemed unlikely that Warner would be able to break the consortium put together by Believe CEO and founder Denis Ladegaillerie, who earlier this year announced his own bid to buy the company back as part of a consortium in partnership with EQT and TCV.

Warner had initially expressed informal interest in buying Believe, and had threatened to call in the French financial market authority - the AMF - to intervene in the Ladegaillerie-led consortium bid, in order to allow Warner an opportunity to formalise its offer. Believe's board called in the AMF themselves, and after a swift ruling by AMF then formally invited Warner to make a "binding, unconditional and fully-financed offer" by 7 Apr.

In earlier coverage CMU also pointed out the potential regulatory hurdles that Warner might face were it to have put in a formal offer for Believe. This was subsequently reiterated by French indie trade body UPFI in a statement that flagged the "potentially devastating consequences" of Warner being allowed to acquire Believe. In its statement UPFI called on the French government to intervene.

It's impossible at this point to say whether Warner decided to pull out because of this, or whether simply because after consideration it decided that the deal wasn't right for it, or because it realised it would not be able to break the consortium's effective deadlock.

We will bring you more on this as the facts become clearer.

UPDATE 6 Apr 2024, 4.45pm: Believe has now also issued a statement, which (translated) says:

Paris, 6 April 2024 –The Ad-Hoc Committee of Believe has taken note of Warner Music Group’s decision not to submit a binding offer for a combination with Believe (“WMG”), as set out in Warner Music Group’s press release of earlier today. The Ad-Hoc Committee will review the situation with all interested parties (including the Consortium composed of EQT, TCV and Mr Denis Ladegaillerie, as well as the historical shareholders of Believe1 ) to determine next steps in relation to the possible evolution of the Company’s control and will inform the market accordingly.

The statement clarifies that "historical shareholders" means "the selling TCV fund, Ventech and Xange".

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