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Twenty parties interested in Warner, is one of them Gary?

By | Published on Monday 14 February 2011

Warner Music Group

Over 20 parties have expressed an interest in buying some or all of the Warner Music Group, according to a report in the New York Post, which cited some of those pesky “sources” last week.

As previously reported, owners of the US-based music major has called in the clever, clever experts (aka economy destroying idiots) from investment bank Goldman Sachs to review the company’s options, which might include expanding through an acquisition of some of EMI, or a sale of some or all of the Warner Music empire, or a combination of the two. Insiders say that some of Warner’s bigger shareholders feel that if they are going to sell some of the company they should do so before Citigroup formally puts EMI up for auction, and are therefore already sounding out possible buyers. Over 20 of them.

And if the Daily Mail is to be believed, one of those possible buyers being sounded out is a certain Mr Gary ‘The Guy’ Hands of Biscuit Street, Guernsey. As previously reported, Hands said in a speech last week that he would consider buying back EMI, the music company into which he pumped two billion before it was repossessed earlier this month by Citigroup, the bank which had financed his entry into the music business in 2007. But only, he added, if “the price was right”. As it stands, Citigroup seems to value the EMI of 2011 somewhat higher than Hands does.

Why Hands would now want to buy into a different music company, given how much EMI cost him both financially and in terms of reputation, isn’t clear. Though if he could lead a consortium of bidders who would share the risk, he certainly has more knowledge of the music business now than many of his private equity rivals, and perhaps once in control of Warner he could engineer the long anticipated merger of it and EMI. Though that is, of course, a merger that could face competition regulator issues.

No one official at Warner, EMI, Citigroup, Goldman Sachs or Terra Firma is commenting on any of this, but hey, it’s fun to speculate. Also linked to a Warner bid, and more realistic it would seem, are BMG backers KKR and its rivals in the upstart music publishing domain, Imagem, both of whom have been very acquisitive of late. That said, while BMG has indicated it would be interested in expanding its sound recording catalogues, it seems likely Imagem would only be interested in Warner’s publishing business Warner Chappell.

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