Boosey & Hawkes, one of Britain's most famous music publishers, yesterday reached the finale of its long-running attempt to sell itself, agreeing a £40.1m deal with a management buy-out team.
Regent Street Music, which was created by John Minch, managing director of the publishing arm, and a number of others, will pay 195p a share for the company. It has been backed by the private equity funds Stirling Square and European Acquisition Capital.
Mr Minch and other managers will own 15 per cent of the company. Stirling Square and European Acquisitions will each own 42.5 per cent.
The deal brings to an end one of the most tortuous takeover battles in the City, which began almost two years ago when Boosey & Hawkes, which owns the music rights to composers such as Sergei Rachmaninov and Igor Stravinsky, in effect put itself up for sale.
The 240-year-old West End company started an auction because it received an approach, widely thought to be from rival Music Sales. But it initially became vulnerable because it discovered that management at the company's Chicago office had racked up £12m of bad debt supplying customers who could not pay.
Boosey & Hawkes offloaded its famous instrument workshops - which made the bass guitar used by Sir Paul McCartney when he was in The Beatles - to another private equity group in February.
Rutland Fund Management paid £33.2m for the business in a deal which also comprised clarinet maker Buffet Crampon and Besson.
Regent Street Music has beaten off numerous other suitors for Boosey & Hawkes' remaining music publishing business, with EMI thought to have been one participant in the auction for the business. Boosey & Hawkes' shares moved up 22.5p to 192.5p.
EMI, which is not a shareholder in Regent Street Music, has however signed an agreement to be a business partner, selling classical music to which Boosey & Hawkes owns the rights to advertisers and film producers, especially in the United States.
As part of the deal, the new management team will be led by Mr Minch and a new manager, Andrew Gummer.
Richard Holland, who has been chief executive of the music company for 14 years, is set to step down. He said yesterday's deal represented an "attractive price" for shareholders.
He added he was "philosophical" about the change of management. "There is some rationale to what is happening. Once we had sold the musical instruments business, what was left was of insufficient size to remain on the stock market," Mr Holland said.
The company traces its roots back to the 1760s when John Boosey founded a music-lending library in London. It diversified into instrument making from the 1850s.
The company said that, in the first half of the year, the music publishing division had performed "satisfactorily" with growing royalty revenue, particularly in America and Australia.
The takeover is being funded through a £50m debt facility provided by Royal Bank of Scotland.Reuse content