Believe easily attracts enough demand to execute €300m IPO… within three days

Denis Ladegaillerie, CEO, Believe

When Paris-headquartered Believe announced Tuesday (June 1) that it had launched its IPO in Paris, some were confused to see that it was only aiming to raise €300 million, as opposed to the €500 million it initially suggested it might raise back at the start of May.

Within hours of the IPO announcement, Believe CEO Denis Ladegaillerie explained the move: he told French media that Believe had made the decision to lower its raise target partly because it would be “less dilutive” for current shareholders.

The €300 million would be enough to fund the distribution and services company’s acquisition plans until the end of 2023, he noted – after which there would be “more interesting options” to raise another €200 million-plus.

What Ladegaillerie appeared to be getting at was that Believe – currently worth approximately €2 billion – had decided to float a lesser portion of its company via the IPO (around 15%) than initially planned because, by the time 2023 rolls around, the firm would be worth significantly more than it is today, and could raise again in a stronger position.

This was not, he was telling us, because Believe was worried about soft demand from potential shareholders.

He most certainly got that right. According to reports in both Bloomberg and Reuters this morning (June 4), Believe has already attracted enough investor demand to cover the entirety of the order book for its IPO’s 15,384,616 initial share issue. It did so within the space of just three working days, following its Tuesday morning announcement.

Not only that, Believe has also secured maxed-out demand for a ‘greenshoe’ allocation of additional shares, worth 10% of its initial issue.

In other words, it’s a safe bet that Believe has locked in IPO share sale orders that will raise the €300 million it wanted, plus 10% more (i.e. €330 million in total).

We already know who one of those shareholders will be: Believe announced Tuesday that Fonds Stratégique de Participations (FSP) had committed to place an order for shares in the amount of €60 million as part of the IPO.

Believe will set the final price of its public offering next Wednesday (June 9), and is expected to start trading on the Paris Euronext the following day.

Believe’s consolidated revenues hit €124 million in Q1 2021 (which Believe calls its most “prolific” ever quarter), up by 26% (+23% organic) on the same period of 2020.

Believe owns DIY distribution platform TuneCore, as well as running its own-brand artist and label services offering.

Believe Artist & Label Services recruited new clients in Q1 including multi-platinum-selling UK singer/songwriter James Morrison, as well as Communion Records – the current home of Laurel, Bear’s Den and Lucy Rose, which has previously helped launch the careers of Ben Howard, Michael Kiwanuka and Catfish and the Bottlemen.Music Business Worldwide