Warner Music to be sold for £1.8bn

James Thompson
Monday 02 May 2011 00:00

Two parties are battling it out to acquire Warner Music in a deal worth £1.8bn, which could be unveiled in days.

The billionaire Gores brothers and Len Blavatnik, the media and mining tycoon, are poised to submit binding bids for Warner Music, which manages artists from Michael Bublé to Jay-Z, this week. Both sides plan to inject £600m of equity into the business and assume its £1.2bn debt.

Warner Music put itself up for sale after it hired Goldman Sachs and AGM Partners to conduct a strategic review in January. It initially attracted about 10 bidders but that field has been whittled down in recent weeks.

Mr Blavatnik is an existing shareholder of Warner Music and sat on its board until 2008. He also owns Top Up TV, which sells pay-TV channels to Freeview watchers and is one of the four billionaires who have invested in TNK-BP, the oil company jointly owned by BP.

Tom and Alex Gores cut their teeth in the US private equity industry in their 20s and have made fortunes from leveraged buy-outs. Tom founded Platinum Equity in 1995 and the firm now has a wide portfolio of investments, with offices in the US and Europe.

Whichever party eventually acquires Warner Music is likely to explore a merger with EMI, which Citigroup wrested out of the hands of the business tycoon Guy Hands earlier this year. Terra Firma, the private-equity firm run by Mr Hands, acquired EMI in a £4.2bn deal in 2007.

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