Warner Music eyes potential 1.65 billion bid for French record label Believe

Investing.com -- Warner Music Group (NASDAQ:WMG) has said it has initiated talks with Believe (EPA:BLV) over a potential merger agreement that would value the digital music group at 1.65 billion euros.

According to a statement from the U.S. recording giant on Thursday, Warner Music approached Believe on a confidential, exploratory and non-binding basis in February and requested access to a "limited list of key due diligence information" prior to possibly submitting a formal offer.

At this stage in the negotiations, Warner Music said it is placing a value of at least 17 euros per share on Believe, representing a 9.5% premium to the French firm's last closing price. The transaction could be for cash only, Warner Music noted, adding that no decision has yet to be taken and the possibility of a share component in the final deal has not been excluded.

The announcement comes after Believe founder Denis Ladegaillerie teamed up with a group of investment firms last month to offer to take the record label private for 1.46 billion euros.

Warner Music called Ladegaillerie's bid "purely financial," arguing that its proposal would in contrast also give Believe strategic support and economic stability to help the business grow into new regions.

Paris-listed shares in Believe were higher in mid-morning trading on Thursday.