Big fish in music looking to hook Chrysalis for a publishing feast

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The Independent Online

Chrysalis, the UK's largest independent music publisher, has revealed that it has been approached by some of the industry's biggest fish looking to take over the company following the sale of its radio assets.

Chrysalis has been in the takeover spotlight since it sold off its radio division for 170m in July, a deal that left the company focused on its music publishing division. Its roster includes the likes of Blondie, David Gray, The Gossip and Jim White as well as a host of songwriters. The company is not as reliant on CD sales as some of its rivals as it also earns royalties when its songs are used in commercials, films, covered by new artists or played live.

Chrysalis, which was founded in 1969 by Chris Wright who remains chairman of the company, also owns an incubator record label and a struggling CD distribution business but it is the steady growth of its publishing division that has caught the eye of the industry giants with the likes of Sony, Warner Music and EMI linked with a bid. Music majors need to offset the impact of weakening CD sales by investing in areas like publishing, merchandise and artist management services. Talks with potential acquirers are considered very preliminary and no formal offer has been lodged for the company.

It is thought that Chrysalis management would be open to a sale of the business but are not looking to sell at any price. It is in the process of returning over 96m to its shareholders following the sale of its radio division.

Numis Securities said that a competitive auction for the music publishing business could push its value up to 180m compared to around 155m as an independent company. Chrysalis said that it is in the market for acquisitions itself with the company likely to be looking at small publishing catalogues owned by small companies or by individual artists and songwriters, or could look to expand its small live music and artist management operations.

Chrysalis is a famous name in the music industry. Following success with Jethro Tull and Procol Harum in its early years, the company went on to have huge success in the 1980s with acts including Ultravox, Spandau Ballet, Blondie and Billy Idol. Meanwhile, its offshoot label 2Tone launched the career of second-generation ska acts The Specials and Madness. The record label was sold to EMI in 1991, leaving Chrysalis as music publisher and radio company.