EMI ends era with sale of assets
EMI, the music company that housed The Beatles until it was split up and sold last year, goes on the auction block again this week as new owner Universal Music Group divests some assets to meet antitrust requirements.
Parlophone, home to Coldplay, the Pet Shop Boys and Tina Turner, accounts for about half of a package of labels with a valuation of about 400 million pounds (NZ$777 million), according to a person familiar with the process who asked not to be identified because it is confidential.
A data room detailing the assets for sale, artist rosters and financial information will be opened this week for entities that have expressed interest, including Warner Music Group, BMG Rights and Sony Music Entertainment, the person said. Other assets being offered include the Sanctuary label, home to The Kinks and Motorhead, and the Mute label, which represents Moby.
Vivendi's Universal Music, the world's largest record company, bought EMI's recorded music unit for 1.2 billion pounds last year and must sell almost two-thirds of the business to win approval from competition regulators in Europe and the United States. Universal Music will retain London-based EMI's rights to The Beatles and Robbie Williams among other assets.
Representatives from Universal Music, BMG Rights and Sony Music declined to comment, while officials at Warner Music couldn't immediately be reached for comment.
Among the labels for sale, Parlophone, Chrysalis, EMI Classics and EMI Records, whose acts include Pink Floyd, increased revenue in the 12 months through March by 42 percent to 375 million pounds from a year earlier, according to information released to bidders that is obtained by Bloomberg. Sales in the five months through August climbed 5 percent to 105 million pounds, while gross profit margin rose 2 percentage points to 52 percent, according to the data.
The first round of bidding is expected in mid-to-late December and Universal Music is seeking to complete the sales process in the first half of next year, the person said.
Simon Fuller, creator of the Idol television show franchise, and Chris Blackwell, founder of Island Records, have jointly approached Universal about bidding, and billionaire Ron Perelman has also talked to the company, the person said.
Representatives for Fuller and Perelman didn't return messages seeking comment.
Bank of America Merrill Lynch and Goldman Sachs are managing the sale.
Citigroup seized EMI from Guy Hands' private-equity firm Terra Firma Partners in February 2011 after it failed to meet loan terms. Hands bought EMI in 2007. Under Hands, who cut jobs and reorganised the business, acts including the Rolling Stones, Paul McCartney, Queen and Radiohead left the label.
A Sony Corp.-led group agreed to pay US$2.2 billion for EMI publishing when the company was split up last year.