Universal Sanctuary bid approved
EmptyLONDON -- Weeks of rumors that the struggling Sanctuary Group was about to be taken over proved to be on the button today when Universal's £44.5 million ($87.68 million) bid was approved by the Sanctuary board.
The cash offer works out at 20pence (40cents) per share. Sanctuary's share price had fallen as low as 11.25p on May 17 but climbed significantly in recent days as gossip about a deal gathered strength and the company's announcement to the Stock Exchange that it had received approaches (Billboard.biz, 5/18).
The price, offered through Universal subsidiary Centenary Music Holdings Ltd., therefore reflects a premium of about 59.2% to the average closing price of 12.56p per Sanctuary share for the three months prior to May 17.
The agreement for the international music group encompasses recorded products, merchandising and artist services including artist management and live agency arms.
On May 29, Billboard reported the sale of Sanctuary's share in the studio operation Air Edel for almost half a million pounds.
Commenting on the offer for Sanctuary in a statement, Universal chairman and CEO Doug Morris said: "We are delighted with today's announcement as this transaction represents an important step forward for both Sanctuary and Universal. The Sanctuary business will be a good strategic fit for us and our objective over the coming months is for Lucien Grainge [chairman and CEO, Universal Music Group International] and his team to work with Frank Presland and the Sanctuary management team, and their artists."
"We have a great opportunity to strengthen and advance Sanctuary's position as a significant player in artist management, agency and merchandising, as consumers' appetite for music grows worldwide."
Robert Aylin, Sanctuary's chairman replied in a statement: "The past few years have proved a very difficult time for Sanctuary and a very disappointing one for its shareholders. Much progress has been made by the new board in the past 12 months. However, growth and profitability will continue to be hampered by the Sanctuary group's present capital structure and by industry factors. Therefore we intend to recommend this offer from Centenary."