UMG gets the go-ahead to buy Sanctuary
EmptyUniversal Music Group will take London-based Sanctuary Group Plc. into private hands after winning shareholder approval for a buyout Thursday.
In a statement issued just before the close of trading on the London Stock Exchange, UMG confirmed it had reached the 90% required level of acceptance to conclude its proposed acquisition.
Just ahead of the third deadline placed on the deal, UMG's Centenary business declared it had received, or acquired, acceptances totalling 89.8% of the issued share capital of Sanctuary. Centenary also purchased a further block of shares, representing 0.2% of the issued share capital of Sanctuary, giving the music major a full 90%.
"Doug Morris (chairman and CEO, Universal Music Group) and I are delighted that we now hold over 90% of Sanctuary Group shares," said Lucian Grainge, chairman and CEO of Universal Music International, in the regulatory announcement.
"Following UMG's acquisition of BMG Music Publishing earlier this year," he says, "this deal represents another important step in the diversification of our business and in providing even more integrated services to our artists and songwriters."
The wholly unconditional offer will remain open for acceptance until further notice, Sanctuary said in its statement. At least 14 days' notice will be given by an announcement before the offer is closed.
UMG on June 15 announced its intention to acquire London-based Sanctuary at 20 pence (40 cents) a share in cash, valuing the company at about £44.5 million ($87.7 million).
A combined UMG-Sanctuary will pool an enormous wealth of reggae catalog, and give Universal a valuable foothold into the live music business through the independent music firm's artist management and live agency arms.
Friday's announcement should call time on the financial troubles, plummeting stock and profit warnings which have dogged publicly traded Sanctuary in recent years. In early 2006, the company launched a £110 million ($205 million) rescue package, just before its board sacked group founder and CEO Andy Taylor. Taylor's co-founder Rod Smallwood soon followed him out the door.
In the past 18 months, Frank Presland, CEO of Sanctuary's Twenty-First Artist Management unit, and former British Airways CEO Bob Ayling have been brought to the helm to steady the Sanctuary ship.
The company's woes, however, have continued. Sanctuary warned earlier this year that its recorded product division "continues to suffer" and noted that it would not achieve overall profitability until 2008 or later.