Rapino And Desmond In Venue Swoop

The company Live Nation chief Michael Rapino and Irish promoter Denis Desmond formed to buy out Mean Fiddler Music Group is looking to get its hands on a share of more top U.K. venues.

Hamsard 2786 Limited, which paid £37.9 million (then US$71.6 million) for MFMG in April 2005, is negotiating to buy 51 percent of Academy Music Group, which owns London’s Brixton Academy, Shepherds Bush Empire and a string of venues in major U.K. cities including Bristol, Birmingham, Liverpool, Newcastle and Glasgow.

All the provincial rooms are an integral part of the U.K. touring circuit for bands capable of pulling between 500 and 2,000 ticket buyers, and Brixton and Shepherds Bush are known worldwide.

As a result of the Fiddler deal, Hamsard – a joint venture between what was then Clear Channel U.K. and Desmond’s Dublin-based Gaiety Investments – already has London venues including The Astoria, The Forum, Borderline, The Garage, Jazz Café and a couple of nightclubs.

It also manages the newly refurbished Wembley Arena, although Live Nation staff actually runs the venue.

The possibility of an AMG deal was first flagged when the U.K.’s Office Of Fair Trading (OFT) posted a note on its Web site June 15th inviting objections from interested parties. It’s likely to follow that by sending out formal letters.

When it comes to the Hamsard bid, the OFT is more likely to listen to objectors who feel the public could be disadvantaged rather than opposition from competitors.

Hamsard president Paul Latham said the proposed deal is “part of an ongoing strategy” to build up the company’s venue portfolio.

Describing AMG as “a leading light in going forward to achieve that goal,” he told Pollstar he first looked at the company when he was with Apollo Leisure, prior to that organization being rolled up in SFX’s great European acquisition spree of the late ’90s.

Most of Live Nation’s U.K.-owned and managed venues are, apart from a few additions, the ones SFX bought from Apollo.

“Through all the changes that have happened since then (Clear Channel buying out SFX and then spinning off the live music wing as Live Nation), we’ve continued to monitor the company’s progress,” Latham explained, drawing attention to the fact that the business pages of the U.K.’s The Sunday Times recently highlighted AMG as “one to watch.”

It’s likely Desmond would have been a key player in helping to open negotiations. Apart from his share in Hamsard, he also has about 12 percent of AMG, as do London-based promoters Metropolis Music and Manchester’s SJM Concerts. Northcote has the same stake.

The narrow 51 percent majority of the shares are owned by funds managed by RJD Partners and F&C Private Equity Trust, which raised the money for the Northcote-led £33.5 million management buyout of the old McKenzie Group in 2004.

From the time that deal was done, it was never a secret that the investment houses had bought in with the intention of turning a profit and getting out within three years.

Now, about 22 months down the line, a successful Hamsard bid would mean the company gets control of more U.K. venues and Northcote can send the money men away with the profit they wanted.

No one is letting on what Hamsard has offered, but it’s obviously likely to be more than that £35.5 million RJD and F&C stumped up two years ago, particularly as AMG has expanded its own venue portfolio during that period.

At press time, it wasn’t possible to get comment from Rapino, Desmond or Northcote.

– John Gammon