Report: WMG Vs. EMI, The Rush Is On To Sell
February 11, 2011 at 4:00 AM (PT)
THE NEW YORK POST reports, "WARNER MUSIC GROUP is pushing ahead with a sale in a bid to beat rival EMI to the punch. WARNER, hoping to get its sale in place before the recorded music and music publishing assets of rival EMI are formally put on the block, is asking bidders to submit first-round bids for all or part of its business by the end of the month. So far, WARNER has attracted more than 20 interested parties, sources said."
WARNER MUSIC GROUP hired the investment bank GOLDMAN SACHS to seek out potential buyers for the company, just over two weeks ago (NET NEWS 1/21).
This has been a busy week for the company. On TUESDAY (NET NEWS 2/8), WMG released its first -quarter financial results for the period ended DECEMBER 31st, 2010. For the quarter, revenue declined 14.1% to $789 million from $918 million in the prior-year quarter, and was down 11.9% on a constant-currency basis. The decline in revenue "reflected the continued transition from physical to digital in the recorded music industry as well as a competitive holiday release schedule for the industry," said WMG.
YESTERDAY (NET NEWS 2/10), ALL ACCESS reported MOODY'S INVESTORS SERVICE is considering lowering its ratings for WARNER MUSIC GROUP.
While WMG tries to move quickly, CITIGROUP, which took control of EMI at the beginning of this month (NET NEWS 2/1), is reportedly moving quickly to sell off all or parts of the music company.
"The timing matters as the two music majors will weigh on each others' prospects if they hit the market at the same time," writes THE POST. "For instance, WARNER will have a tougher time selling its publishing arm, WARNER/CHAPPELL, if it has to compete with EMI's larger publishing business."
Names associated with bids for both WMG and EMI reportedly include ZOMBA founder CLIVE CALDER and Russian investor, LEONARD BLAVATNIK in addition to SONY MUSIC, UNIVERSAL MUSIC GROUP, IMAGEM, a music publisher based in HOLLAND and private-equity companies KKR, APOLLO and PROVIDENCE EQUITY.