Report: Bertelsmann Considering Sale Of Sony BMG Stake
March 27, 2006 at 12:28 PM (PT)
BERTELSMANN AG is reportedly considering a sale of its 50% stake in SONY BMG, according to a story in the FINANCIAL TIMES. The sale, should it transpire, would be worth an estimated $2.4 billion (when combined with the company's BMG MUSIC PUBLISHING operations, which are also reportedly being considered for a sale, that total comes to an estimated $3.5 billion to $4 billion).
The sale of the company's music arm would assist the GERMAN media giant in buying out all or most of a 25% stake held by its only outside investor, GROUPE BRUXELLES LAMBERT, which has said that it plans to take its stake in the private company public. The rest of BERTELSMANN is owned by its founding family, whose patriarch, REINHARD MOHN, is reportedly determined to keep the company private. GROUPE BRUXELLES LAMBERT has threatened to take their share in BERTELMANN public as early as MAY.
The FINANCIAL TIMES reported that the sale plans were at an early stage, but that BERTELSMANN had asked investment bankers to begin preparations.
While SONY has the right to assume full control of SONY BMG, analysts for the FINANCIAL TIMES say such a move by SONY would be unlikely while the company continues to try and repair its electronics business. Sources have also told the NEW YORK TIMES that while SONY may not be interested in acquiring BERTELSMANN's stake outright, they may be open to acquiring control either on their own or with the assistance of private equity backers. Should SONY not opt to take control of BERTELSMANN's stake, the GERMAN company would have to find a buyer willing to be in a partnership with the JAPANESE group or persuade SONY to also sell its stake.
As for the aforementioned BMG MUSIC PUBLISHING business, one of the major names being tossed around as interested in a purchase is VIVENDI UNIVERSAL.