Who’s Trying To Buy Sanctuary?
In the five days after The Sunday Times speculated that
Sanctuary is due to present interim figures in three weeks and the market will want to know whether a deal has been cut before then.
The Sunday Times followed up June 5 by saying
As the company shares eased up 0.5 percent to 43.75 during the course of the day (June 3), Sanctuary put out a statement that said it was in preliminary talks “which may or may not lead to an offer or a further business opportunity.” It said further announcements would be made “as appropriate and in due course.”
The Sunday Times first raised the idea that Sanctuary could be for sale in a December 5 article that said Warner Music chief Edgar Bronfman Jr. was looking to buy up management companies in advance of that company’s stock market flotation.
The paper said “sources close to Bronfman” have revealed he’s looking to add more publishing, merchandising and music management to the company’s business mix. Sanctuary has a finger in all those pies, plus record company interests and a couple of booking agencies (
After the takeover talks were made public, Numis Securities sent a research note to clients that said, “We are not surprised the group has attracted consolidation speculation.” It valued the basic share at 45p and pointed out that a premium would be needed to gain quick control. That pitches Sanctuary’s value at about £150 million.
However, Investec Securities said selling Sanctuary would lessen its talent gathering strength as artists are attracted by its independence from the majors.
Earlier this year, New York-based Sanctuary Group CEO Merck Mercuriadis was quoted as saying, “At the end of the day, whether we’re a listed company or whether we’re not, we’re always going to be a responsible company. What we don’t do is allow our artists to be affected by financial matters. To me, we’re first and foremost an artist company.”
The first shareholders a buyer would need to target are Dutch TV producer John de Mol, whose investment vehicle Talpa Capital has a near 20 percent stake, while Fidelity Investment Manager and ING Bank have a little more than 10 percent each.
Sanctuary Group, which started as a management company in 1976, has developed a broad-based business model and works as record company, manager, publisher or agent with a massive range of artists including
For the year ending September 30, 2004, it reported steady – although very slightly reduced – pre-tax profits of £16.1 million (US$30.3 million), while turnover was up 45 percent to £220.9 million (US$416 million).
— John Gammon