Elton John finds Sanctuary with £16m takeover deal

Sir Elton John has pocketed upwards of £8m from the sale of his management company to Sanctuary Group.

Sir Elton John has pocketed upwards of £8m from the sale of his management company to Sanctuary Group.

The music group has paid £16m in cash and shares for Twenty-First Artist, a company founded five years ago to look after Sir Elton's career in which the pop star owned a majority stake. The two other co-founders of the business, Frank Presland and Keith Bradley, have shared the rest of the proceeds.

As part of the deal, Sir Elton has signed a five-year management contract with his new owners, which, unlike many management deals, allows Sanctuary to take a commission on the profits earned from all aspects of Sir Elton's career. He will join the likes of Morrissey, Beyonce, Guns N' Roses, Nelly, Fleetwood Mac, Iron Maiden, The Who, Manic Street Preachers and Groove Armada, who are also with Sanctuary.

Andy Taylor, the executive chairman of Sanctuary, said Sir Elton had wanted to find a management company that could offer more global reach and expertise in areas such as sponsorship, advertising, events and media rights than his own small business could provide. Sanctuary, which is also a record label and an agent for live tours, already works with Sir Elton on his merchandising.

Mr Taylor said he was not fazed by Sir Elton's notoriously fickle temper. "All creative people are naturally a bit temperamental. But we have such respect for Sir Elton and his music that I don't think it will ever be a problem," he said.

Fans of Sir Elton, who has sold nearly 250 million records, should expect a renaissance of his career. Mr Taylor said: "Sir Elton's career continues to strengthen. He is one of the world's superstars and loves performing. We certainly think there are lots of opportunities for him and his music. He is bound to become one of our most significant clients." Sir Elton said he had been "very impressed" with the attitude Sanctuary took towards its artists.

Of the £16m price tag for Twenty-First Artist, £12m was funded through a share placing with existing investors and £4m has been paid in cash. Mr Presland and Mr Bradley will join the Sanctuary Group and remain Sir Elton's managers.

The trio will have the chance to earn up to a further £10m from the takeover, if Sir Elton signs another five-year management contract with the group in 2010 and if Sanctuary hits certain earnings targets.

Sanctuary also announced that trading was in line with expectations. In January it shocked investors with news that it would write off £14m on the sale of a television business, sending it into a loss for the year.