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In a narrative already full of twists and turns, we’ve arrived at one other main second within the battle to (probably) purchase Imagine.
Earlier this month, MBW reported that the Autorité des Marchés Financiers (AMF), France’s equal to the Securities and Change Fee within the US, had been dragged into this saga.
Imagine’s board turned to the AMF to adjudicate whether or not a specific transfer by a consortium led by Imagine 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 ideas of public bid legislation” in France – “specifically the ideas 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 Imagine’s board despatched up to now 24 hours and obtained by MBW.
Why is that this so essential?
As a result of if the Ladegaillerie consortium is/was capable of “waive” the situation, it could all-but-guarantee its acquisition of round 72% of Imagine (for starters).
That 72% acquisition, if it went forward, would primarily finish any risk of a takeover of Imagine by Warner Music Group. WMG is understood to be contemplating whether or not to make a rival supply to purchase the French firm at the next value than the Ladegaillerie bid.
Ergo, the AMF’s choice would appear to maintain alive Warner’s possibilities of formally getting into a bidding course of for Imagine.
How we obtained right here – and why the AMF says a Ladegaillerie ‘waiver’ can be in ‘violation of the ideas of equity’
On February 12, Imagine 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 at present held by 4 shareholders: Ventch and Xange, plus TCV and Denis Ladegaillerie himself.
Imagine mentioned that this Ladegaillerie takeover of 71.92% can be topic to 2 circumstances: (i) Regulatory approval in France; and (ii) the issuance to Imagine shareholders of the board’s approval of Ladegaillerie’s bid, aka a “equity opinion” knowledgeable by a report from unbiased consultants.
On February 21, Imagine’s board obtained a personal expression of potential curiosity in shopping for the corporate from Warner Music Group.
Then, on February 27, WMG instructed Imagine that it was contemplating making a takeover supply for Imagine at a materially larger worth than the Ladegaillerie bid. (WMG’s potential bid would worth Imagine 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 following day (February 28), the Ladegaillerie consortium introduced its intention to “waive” one among these previously-announced circumstances for its 71.92% ‘Block Acquisitions’ – the one requiring the Imagine 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.
Nevertheless, Imagine’s board then consulted with the AMF to assist it determine 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 Imagine at a minimum of 17 euros per share, the consortium, which was conscious of this non public info, granted itself a decisive benefit within the success of its bid, in violation of the ideas of equity, transparency and the free play of bids and overbids.”
Marie-Anne Barbat-Layani, AMF
In her letter to Imagine’s board revealed yesterday (March 22), the AMF’s Marie-Anne Barbat-Layani wrote that the previously-agreed circumstances of the Ladegaillerie consortium’s method meant that “the execution of the sale agreements [are] depending on the favorable opinion of [Believe’s] board of administrators”. She known as this “a vital regulatory stage within the progress of a public supply”.
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 probably bidding for Imagine at a specific value (€17-per-share or above), “the [Ladegaillerie] consortium, which was conscious of this nonpublic info, granted itself a decisive benefit within the success of its bid, in violation of the ideas 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, Imagine’s board placed on ice a request from WMG to assessment “confidential” monetary materials about Imagine.
With the AMF’s assessment of the “waiver” now full, we await information on when/whether or not WMG will get its palms on this “confidential info”.Music Enterprise Worldwide
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