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$3 billion Warner Music buyout could be completed this week

Written by Andre Yoskowitz (Google+) @ 02 May 2011 0:09 User comments (5)

$3 billion Warner Music buyout could be completed this week Warner Music Group could be sold at the end of the week for $3 billion, say sources, as all final buyout bids for the Big 4 record label are due tomorrow.
So far, the two competing bids are coming from Len Blavatnik's Access Industry and a joint bid by Tom and Alec Gores' Platinum Equity and Gores Group.

Warner says two major labels (BMG and Sony) were bidding, as well, but "fell short of what Warner's board was looking for from strategic buyers." It appears that Warner wants a premium from labels as the transaction will take much longer to complete, given anti-trust review.

With all that being said, insiders are still skeptical that an actual deal will be completed.

Warner put itself up for sale in January, following years of declining music sales.

"The key issues for Warner Music's board are price and simplicity of the transaction process," say the sources.

Warner has $1.9 billion in debt, and is only expected to make $333 million in income before interest, depreciation and amortization, for the fiscal 2012.

The winner of the auction is also likely to bid on EMI after, using the purchases of both companies to lower costs.

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5 user comments

13.5.2011 22:05

Keep pirating boys we're down to the big 3 now. Buhahahaha!

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26.5.2011 9:20

Originally posted by DXR88:
Keep pirating boys we're down to the big 3 now. Buhahahaha!

They will never try selling the music for a fair price. They prefer to go out of business. They distroy DVDs and CDs if they can't sell them for their asking price. They have to fail with brains like that!

36.5.2011 21:19

3 billion to buy 1.9 billion debt. That the spirit.

Goodbye and good ridance.

Windows 7 HP 64x, AMD x6 1100T 3.3GHz, 8 Gig Ram,1 x LG DVD Burners, Gigabyte GTX560, 1 x OCZ 60GB SSD 1 x Seagate 1TB, 32" LCD Monitor

47.5.2011 0:48

wow i think they will sell the physical music company but switch to fully digital downloads starting a new online company im sure they will keep the name

57.5.2011 1:19

Innovate or die. The record label model died in 1998 with Napster yet here we are 13 years later and there is still no innovation. Hell, these idiots won't even sign with Spotify or let Apple/Amazon offer cloud streaming of people's OWN music.

Labels, please, on the way out, take RIM and Kodak with you.

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