German live music firm DEAG – which operates in the UK market via its interests in companies like Kilimanjaro and Gigantic – has announced that it will leave Frankfurt’s stock exchange and become a privately-owned company. The tour promoter and ticketing firm has been a publicly listed entity for 23 years.
The move to take the company private is backed by DEAG’s biggest shareholder Apeiron Investment Group, which currently controls 18% of the business. It is offering to buy out other shareholders via a Malta-based subsidiary called Musai Capital, with an offer of 3.07 euros per share, which values the firm at just over 60 million euros in total. That said, a significant number of the company’s existing shareholders are expected to retain a share in the private DEAG business.
In a statement to investors yesterday, DEAG said: “Together with US investor Mike Novogratz, who holds approximatively 14% of the DEAG shares through his family office Galaxy Group Investments LLC, and certain other shareholders of DEAG, Apeiron and [Musai] agreed upon the key terms of a shareholders’ agreement”.
“The parties to the shareholders’ agreement, which in total hold approximately 47% of the DEAG shares, will not accept the planned offer for their DEAG shares”, it went on. “On the basis of the shareholders’ agreement, subject to the successful closing of the transaction, they will exercise joint control over DEAG”.
Commenting on the move, the company’s founder and CEO Peter Schwenkow added: “Despite the continuing uncertainties about the future of the live entertainment industry due to the ongoing [COVID] restrictions, DEAG is pleased about the continuous support and trust of all members of the management board, the supervisory board, all managing directors, partners, co-shareholders and the current major shareholders who wish to continue to jointly pursue DEAG’s existing growth course in an unlisted environment of the company”.
Those continued uncertainties have helped with DEAG’s restructure, in a way. The proposals now on the table allow those shareholders who would rather not deal with another twelve months of uncertainty to sell out, while those in it for the long haul – who see plenty of opportunities ahead once the COVID pandemic is over – can boost their stakes.
Speaking to IQ, Schwenkow went on: “If you can buy a controlling stake in DEAG at 3.07 [euros a share] and you expect this business to increase in the upcoming years, it’s a good investment, as one day, when live entertainment returns, the share price will be ten euros or more”.
As for his view on how long it will take for live entertainment to return, Schwenkow said that the rollout of the COVID vaccines had increased optimism. That said, he still reckons that, while smaller shows and domestic touring will be back later this year, a full return to normality with large-scale events and global tours is probably more likely in 2022.