The Russian billionaire Len Blavatnik will add Coldplay, Blur and Tinie Tempah to his empire after his Warner Music group emerged victorious in a bidding war to take over the historic Parlophone record label, media sources are reporting Thursday (7th February).
Warners, bought by Blavatnik’s Access Industries private equity group for $3.3 billion (£2 bn) in 2011, won the battle to take control of Parlophone and other EMI assets, which were put up for sale following Universal Music’s takeover of the British company. The deal is worth £487 million ($765 million), considerably higher than Parlophone’s £300 million valuation. Parlophone’s stable, which also includes Kate Bush and Kylie Minogue, will now join Warner Music’s star names such as Ed Sheeran, Red Hot Chili Peppers and Bruno Mars.
Warners, which owns the Led Zeppelin and Fleetwood Mac back catalogue, will also take control of ground-breaking albums by David Bowie, Pink Floyd and Kraftwerk. EU regulators ordered Universal to sell off 30 per cent of EMI’s assets as a condition for the approval of a £1.2 billion takeover of the record company.
Warner beat a joint bid from Sony Music and BMG rights and a consortium led by Simon Fuller, the American Idol creator, to secure the EMI business. The deal gives Warner Music a market share of 20 per cent, edging closer to Sony Music’s 29 per cent, whilst Universal remains the market leader with just under 40 per cent. Moscow-born Blavatnik, 55, is based in London and worth $12.5 billion. The Russian-American industrialist’s empire extends from oil to a sports entertainment group.
He was rumoured to have paid a record $87 million for a Rothko at Christie’s last year and gifted $115 million for the creation of Oxford University’s Blavatnik School of Government. Blavatnik, Chairman and founder of Access Industries, said: “This is a very important milestone for Warner Music, reflecting our commitment to artist development by strengthening our worldwide roster, global footprint and executive talent.”
Universal retains control of the Beatles catalogue and artists including Emilie Sande under the EU-approved deal. Regulators said Parlophone must be sold to a company with a track record in the music industry, which would retain the brand name. Some Parlophone artists expressed concern over their transfer to a new corporate entity. Stephen Cooper, CEO of Warner Music Group, said: “Having the Parlophone Label Group become part of our family represents a unique opportunity for us to join with legendary record labels and artists that are highly complementary to our existing organization from a creative, geographic and strategic standpoint.
“We are committed to making this a great outcome for Parlophone’s artists and employees, who will find in WMG a similar spirit and culture that is dedicated to providing the most supportive and innovative home for recording artists. The continuation of the Parlophone legacy and brand are central to the future success of this combination, and we are proud to have them join us.”
Lucian Grainge, Chairman & CEO of Universal Music, said: “Following this transaction, we will continue with our global reinvestment program that is rebuilding EMI and ensuring that the company is able to reach its full potential. And we’re satisfied that our agreement with Warner Music will provide a home for PLG artists.”
Warners obtained commitments to finance the transaction through a new term loan facility provided through Credit Suisse, Barclays, UBS, Macquarie and Nomura. The closing of the transaction is expected to occur mid-year 2013, subject to regulatory approvals and a consultation procedure with employee representatives. Job losses at Parlophone are expected as the company integrates with its new owner.
Latest photos: of Chris Martin and Jonny Buckland with Coldplayer yellow***star at the Bakery, London (uploaded 3rd February 2013):