Bertelsmann Is Sexy

By describing Bertelsmann as “sexy,” a word that has so far managed to escape the business analysts who’ve been writing about the German media giant, chief exec Gunter Thielen may well be hoping to attract more interest in its BMG Music Publishing division.

In explaining why Belgian financier Albert Frere was reluctant to sell his stock, Thielen told Reuters, “He regrets it a lot because the asset was so sexy, and the people were so nice and he liked the management and the Mohns.”

Fifteen suitors were sent financial information about BMG’s publishing business and Thielen is expecting bids within a month.

Bertelsmann is selling the music company to help raise some of the euro 4.5 billion it needed to buy out the 25 percent stake Frere’s Groupe Bruxelles Lambert (GBL) held in the parent company.

Analysts expected the publishing business to fetch about euro 1.5 billion (US$1.89 billion). Thielen has confirmed Vivendi’s Universal Music, Sony Music, Warner Music Group and EMI Group among the interested parties.

Other bidders are likely to be corporate investment houses, although BMG Music Publishing chief exec Nicholas Firth has said he and some of his colleagues would be interested in exploring the possibility of a management buyout if a “qualified financial sponsor” can be found.

Despite media reports to the contrary, Thielen insisted there were never plans to raise money for the GBL buyout by either borrowing against or selling off the 50 percent stake it holds in Sony BMG.

He said it was always BMG’s intention to hold on to its share in the joint venture music company and also didn’t consider floating more of its pan-European television broadcaster RTL Group in order to finance the GBL deal.

“That’s a strategic asset and at the end of the day we need 100 percent of it, and therefore it doesn’t make sense to float only because we need some money,” Thielen explained.

Apart from the 89 percent stake it holds in RTL, Bertelsmann also owns magazine publisher Gruner & Jahr, book publisher Random House and a global book, CD and DVD club business.

Thielen, who gave the interview in Cannes, France, where he received the media person of the year award from the advertising industry on June 20th, claims Frere only sold the stake in Bertelsmann because the Desmarais family of Canada – a 50 percent partner in GBL – forced him to do so.

– John Gammon