Chrysalis founder nets £30m from sale to BMG
Saturday 27 November 2010
Chrysalis is to be taken over by a German media group and a US private equity giant in a cash deal worth nearly £110m, which will net its co-founder Chris Wright a cool £30.1m.
BMG, a joint venture between Germany's Bertelsmann and Kohlberg Kravis Roberts, will pay 160p a share for Chrysalis, a 45.5 per cent premium to the closing price of 110p on 29 October, the day before the London-based company revealed it was in takeover talks. Shareholders owning 73.4 per cent of Chrysalis – whose back catalogue includes tracks by pop legends Michael Jackson and David Bowie – have backed the £107m bid, which is expected to complete in early February 2011. After four decades of independence, Chris Wright, the chairman of Chrysalis, said: "The deal marks the end of one era and the start of another for Chrysalis."
Mr Wright, who has a 28 per cent stake in Chrysalis, will become the non-executive UK chairman of BMG and join its supervisory board. Back in 1967, Mr Wright formed the Ellis Wright Agency with Terry Ellis, to make a living from managing and booking bands. The company was renamed Chrysalis in 1969 and Mr Ellis sold his shares to Mr Wright in 1985.
Chrysalis grew rapidly in the 1980s and its back catalogue also boasts artists such as Blondie and Billy Idol.
Mr Wright sold the original record label to Thorn EMI in 1991 and offloaded Chrysalis's radio division to Global Radio for £170m in 2007, but crucially he kept its music publishing interests. BMG will use the Chrysalis name for at least the next three years. Hartwig Masuch, the chief executive of BMG, said: "The acquisition of Chrysalis represents an important step forward in our strategy as we build a major global music rights business."
Jeremy Lascelles, the chief executive of Chrysalis, will remain in his role until the deal completes, but sources said it was too early to comment on a future position for him.
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