Virgin sells record label V2
Tuesday 16 May 2006
Virgin has sold out of the music label V2 as it plans for a future that could result in the launch of a Virgin-branded music television station.
Virgin launched V2 in 1996 in a move heralded as Sir Richard Branson's return to the music industry after his sale of Virgin Records in 1992. The sale of the new label follows Virgin Group's deal with the cable television operator NTL which will soon offer customers a one-stop shop for cable television, fixed and mobile telecoms services and broadband internet under the Virgin brand.
The company would not comment on its plans but launching a music television station seems a likely move for Virgin given its heritage in music. Owning V2 would present a conflict of interest for Virgin if it does decide to take on the likes of MTV.
Yesterday proved a busy day for Virgin as it also emerged the company has appointed ABN Amro and Investec to prepare its train ticket reservation and billing system, Trainline.com, for a possible £200m flotation.
Virgin has sold its stake in V2 to the US investment bank Morgan Stanley for an undisclosed sum. The US investment bank now holds a stake of about 95 per cent in V2 after it bought a 47.5 per cent stake in the record label in 2002. Morgan Stanley declined to comment on the deal but is understood to be a passive investor in the label, meaning V2's management will continue to run the business.
Tony Harlow, the head of V2, said the music label is comfortable with its new owner after working with the bank over the past four years. He dismissed any concern that artists at V2 might oppose the deal and said the continued presence of Sir Richard at the label has made artists more comfortable.
"They identify Richard as inspiration and a continued supporter," Mr Harlow said.
Sir Richard will keep a personal stake of about 5 per cent in V2, maintaining his interest in the music sector. The billionaire entrepreneur started building his empire by forming Virgin Records in the early 1970s. The label had a massive hit with Mike Oldfield's Tubular Bells album and fetched a sale price of £550m when it was swallowed by EMI.
V2 is home to a wide array of music artists such as the chart stalwarts Tom Jones, Paul Weller and Stereophonics, plus trendy new names including Bloc Party, Wolfmother and the Datsuns. Artists such as Jim White, Gang of Four, Mercury Rev and Nitin Sawhney are also on the label.
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