After months of industry speculation, Warner Music has confirmed that it has been sold to US industrial giant Access Industries, for a whopping $3.3 billion. The deal, which has seen Access Industries pay $US8.25 cash per share, sees Warner Music Group become a privately owned company and will its listing removed from the New York Stock Exchange.
In usual business double speak, WMG’s Chairman and CEO, Edgar Bronfman, Jr.(whose son is married to M.I.A.), said, “We believe this transaction is an exceptional value-maximizing opportunity that serves the best interests of stockholders as well as the best interests of music fans, our recording artists and songwriters, and the wonderful people of this company. We are delighted that Access will be the new steward of this outstanding business. They are supportive of the company’s vision, growth strategy and artists, while bringing a fresh entrepreneurial perspective and expertise in technology and media. Most importantly, Access supports Warner Music’s commitment to our recording artists and songwriters who are the foundation of our current and future success.”
Len Blavatnik, Chairman and founder of Access Industries, said in the joint press release, “I am excited to extend my longstanding involvement with Warner Music. It is a great company with a strong heritage and home to many exceptional artists. I look forward to working closely with the many talented people within the company.” While the deal will give the company some stability, it remains to be seen as to how Blavatnik’s company will run it.
The spectre of the EMI debacle, in which a private equity firm tried to run a record company and eventually lost it to its bankers after being unable to pay the interest on its debts, hangs over the music business. While Access Industries will no doubt have studied that disaster closely, they are most likely to allow the company to run as it is for the time being, before the bean counters move in and start looking for ‘cost efficiencies’.