Business News Digital Top Stories

Minority shareholder group at Aspiro comes out against Jay-Z bid

By | Published on Thursday 5 March 2015


Jay-Z’s bid to enter the streaming market by buying the Nordic company behind WiMP and Tidal has seemingly hit a hurdle, as an association representing minority shareholders in the company have advised against accepting the hip hop mogul’s offer.

As previously reported, it emerged that a Jay-Z owned vehicle was bidding for Swedish firm Aspiro back in January, which would give the rapper ownership of loss-making streaming music service WiMP and it’s high-quality-audio spin-off Tidal.

The bid was immediately backed by the company’s board and key shareholders, but last month a grouping of smaller investors raised concerns about the offer price, which, it said, “does not sufficiently value the company’s potential”. But at that point the shareholder association said it had not reached a final conclusion, and had submitted a list of questions to the Aspiro committee set up to deal with the bid.

But the answers to those questions seemingly did not impress the shareholder group, who have now told Swedish business paper Dagens Industri: “We will recommend our members say no to the offer. We have accumulated more than 10% of the owners, which is enough to block it”. The shareholder association’s chair said he hoped talks could now begin to agree better terms before Jay-Z’s offer for Aspiro expires on 11 Mar.

However, Fredrik Bjørland, who is leading the bid committee at Aspiro, told The Next Web: “As you probably know, the independent board committee has made a thorough evaluation of the bid from [Jay-Z’s] Project Panther, assisted by an external fairness opinion by ABG Sundal Collier and following a structured process. We still believe the offer is attractive for both the company and its shareholders, and recommend the offer based on this”.

He went on: “We further note that [the minority shareholder association’s] recommendation to not accept the offer is primarily based on an argument that more than 10% will reject the offer and a potentially raised bid by Project Panther. This is a bit surprising, as to my knowledge, we have neither a confirmation that more than 10% will reject the offer – as we are still within the acceptance period until 11 Mar – nor that Project Panther is willing to raise its bid or engage in direct negotiations with the minority shareholders”.

Figures made public under Swedish law as part of the bidding process have provided some insight into the current status of the WiMP/Tidal business, which is still a relatively small player in a very competitive market place, and others have noted that in its current form Aspiro just doesn’t have sufficiently big pockets to fight for market share. Which is ultimately why Bjørland considers the Jay-Z offer to be a good one.

He concluded: “In my opinion, the recommendation to not accept the offer involves high risk, as it is well known that Aspiro is currently unprofitable and in need of capital within twelve months, and the current majority shareholder has indicated it is not willing to support this capital need. We thus believe accepting a 60% bid premium is a far better risk/reward recommendation”.

It remains to be seen if the contrary shareholder organisation really has influence over a sufficient number of minority investors to scupper this deal.