Bertelsmann AG plans to retain ownership of Sony BMG after determining it can afford to pay 4.5 billion euros ($5.8 billion) to buy back a stake in the German media conglomerate without selling its half of the world's second biggest music company.
"We have no intention to sell our 50 percent stake, and we're working on our partnership with Sony," Bertelsmann Chief Financial Officer Thomas Rabe said in an interview on Thursday with Reuters.
He added that Bertelsmann remained on the hunt for additional acquisitions. Sony BMG, home to artists including Kelly Clarkson and Bruce Springsteen, is a 50-50 joint venture with Japanese electronics giant Sony Corp.. The partnership has been shaky over the past year, with a power struggle instigated by Bertelsmann leading to a recent leadership shake-up.
Bertelsmann, based in Guetersloh, Germany, had been contemplating a sale of Sony BMG in recent months as it formulated a strategy on how to afford to buy back a minority stake in Bertelsmann from shareholder Groupe Bruxelles Lambert (GBL).
Its BMG Music Publishing unit is being put up for sale, however, to help finance the acquisition of GBL's 25 percent Bertelsmann stake. GBL, the investment vehicle of Belgium's richest man Albert Frere, had planned to float the stake, a policy opposed by Bertelsmann's controlling family, the Mohns.
"We've had a number of unsolicited offers in the last 12 months," Rabe said, confirming an earlier report by Reuters that Bertelsmann was on the verge of starting an auction of BMG. "There is significant interest in this asset."
Analysts and industry executives have told Reuters that BMG, which owns the rights to songs by Coldplay, Nelly and others, could fetch between $1.4 billion and $1.7 billion, based on their estimates of the company's cashflow and the multiples paid for previous music publishing assets.
Bertelsmann AG plans to retain ownership of Sony BMG after determining it can afford to pay 4.5 billion euros ($5.8 billion) to buy back a stake in the German media conglomerate without selling its half of the world's second biggest music company.
"We have no intention to sell our 50 percent stake, and we're working on our partnership with Sony," Bertelsmann Chief Financial Officer Thomas Rabe said in an interview on Thursday with Reuters.
He added that Bertelsmann remained on the hunt for additional acquisitions.
Sony BMG, home to artists including Kelly Clarkson and Bruce Springsteen, is a 50-50 joint venture with Japanese electronics giant Sony Corp.. The partnership has been shaky over the past year, with a power struggle instigated by Bertelsmann leading to a recent leadership shake-up.
Bertelsmann, based in Guetersloh, Germany, had been contemplating a sale of Sony BMG in recent months as it formulated a strategy on how to afford to buy back a minority stake in Bertelsmann from shareholder Groupe Bruxelles Lambert (GBL).
Its BMG Music Publishing unit is being put up for sale, however, to help finance the acquisition of GBL's 25 percent Bertelsmann stake. GBL, the investment vehicle of Belgium's richest man Albert Frere, had planned to float the stake, a policy opposed by Bertelsmann's controlling family, the Mohns.
"We've had a number of unsolicited offers in the last 12 months," Rabe said, confirming an earlier report by Reuters that Bertelsmann was on the verge of starting an auction of BMG. "There is significant interest in this asset."
Analysts and industry executives have told Reuters that BMG, which owns the rights to songs by Coldplay, Nelly and others, could fetch between $1.4 billion and $1.7 billion, based on their estimates of the company's cashflow and the multiples paid for previous music publishing assets.
Source: http://today.reuters.com
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