(Reuters) -Warner Music Group said it planned to make a bid of at least 17 euros ($18.52) per share for Believe, valuing the French digital music company at 1.65 billion euros ($1.8 billion) and topping an earlier takeover bid from a consortium.
The U.S. music label's potential offer tops the 15 euros per share bid from a consortium made up of Believe's largest shareholders that valued the company at around 1.52 billion euros. The consortium's offer was also backed by the company's board of directors.
Believe's shares rose about 6% to hit a more than two-year high after Warner's expression of interest on Thursday. Home to music labels such as TuneCore, Naïve and Nuclear Blast, Believe was founded in 2005 by Denis Ladegaillerie.
At 17 euros per share, the indicative price offer proposed by Warner remains below the offer price of 19.5 euros per share put forward by Believe when it was listed on the Paris stock market in 2021.
But the would-be offer represents a premium of 9.5% over Believe's last closing price of 15.52 euros on March 6.
Believe works with musicians and music labels to help build up their brand via social media and put their work on streaming music platforms.
It mainly targets lesser-known singers outside the ranks of top global stars.
"As opposed to the purely financial transaction contemplated by the consortium formed by EQT, TCV, and Denis Ladegaillerie... WMG would provide Believe with strategic support and financial stability to help the development and growth of the company, including by accelerating its expansion into new geographies," Warner said.
Contacted by Reuters, a spokesperson for the consortium had no immediate comment.
Warner Music said that it was awaiting some due diligence information before submitting a formal proposal to acquire the French digital music company.
($1 = 0.9179 euros)