Warner Music Group Businesses Receive More Than 10 Bids in Auction
10:07 PM PST 3/1/2011 by Ed Christman
Among the potential buyers: publishing houses BMG and Sony/ATV and investment group Blavatnik, which already owns 2% of WMG. Universal Music did not bid, according to Bloomberg.
Warner Music Group has received more than 10 bids in the first round of the auction being conducted on its behalf by Goldman Bros., according to Bloomberg News, who quoted anonymous sources. Sony ATV and BMG, the Berteslmann/KKR joint venture, reportedly bid on WMG's publishing company, Warner/Chappell Music. While the report says that businessman Len Blavatnik -- who was part of the Thomas H. Lee Partners/Edgar Bronfman-led private equity buyout of WMG from Time Warner -- was bidding for most of the company, other sources said his bid was for the entire company. Meanwhile, Bloomberg News says the Universal Music Group didn't bid because of antitrust concerns and may seek parts of the recorded music business. Other sources indicate that Universal initially didn't make a bid because it took a while to hammer out the nondisclosure agreement and only received the book right before first round bids were coming due last Tuesday. Besides the two strategic bidders, sources say the other suitors were either private equity firms or investment groups, with the offer from Blavatnik, who already owns 2% of WMG, falling into the latter category. While most of the action centered on the publishing arm, at least one bid -- from Blavatnik's group -- was on the entire company and a few contrarian-type suitors bid on the recorded music division, sources say. The book included details about the recorded music operation, but it's clear to most bidders that the private equity owners don't want to sell off only that division, a source familiar with the process says. "They would prefer to sell of Warner/Chappell so they can make a bid for all of EMI when it comes up for sale," that source says. But another source says the bidding process allows the WMG private equity owners to do a mix and match to see what constitutes the best way to maximize their investment in the music company.
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