Although it has spent more than a year limping from one financial disaster to another, it seems
Early reports in papers including The Daily Telegraph suggest the beleaguered music company, which has acknowledged receipt of an unsolicited all-shares bid from its AIM-listed rival, is likely to knock the bid back because it’s not taking it seriously.
MAMA, which has the management of rapidly emerging U.K. acts including
If new Sanctuary chairman and former British Airways chief Bob Ayling recommends his board dismiss the approach, papers including Financial Times and The Guardian predict MAMA – which was formed by former
It’s already put out a statement that says: “While the board of MAMA Group would prefer to work with the Sanctuary board, it is considering proceeding with the possible offer, whether or not the possible offer is, or will be, recommended for acceptance by the board of Sanctuary.”
Neither side is commenting on the value of the offer, but it’s thought likely to be in excess of Sanctuary’s current £42 million (US$77.6 million) stock market value.
MAMA is a little more than one-third the size of Sanctuary, with a market capitalisation of £16 million.
Its takeover proposal is believed to include stripping down the sprawling Sanctuary group to its profitable live music, merchandising and artist management businesses and hiving off the back catalog of artists including
Sanctuary’s price has tumbled since it tried to haul itself up by its bootstraps with a £110 million rights issue. Recent profit warnings suggest its September year-end figures will show a £22 million loss.
Its shares are trading at around 19 pence, which is less than half the spring rights price of 50 pence. Earlier in the month, it sold its urban music management arm, MW Entertainment, back to its founder Mathew Knowles, father of
The deal was one of the first initiatives by new chief executive Frank Presland, who is also manager for
– John Gammon