LN-Gaiety Gets Its Piece Of Academy

LN-Gaiety Holdings Ltd. has overcome the Competition Commission’s objections to it buying a little more than half of London-based Academy Music Group by offloading Hammersmith Apollo and The Forum to MAMA Group Plc.

It has cleared the way for the Live Nation-Gaiety Investments partnership to acquire 56 percent of the £58.1 million valued venue group, which brings in two of the capital’s flagship rooms in The Brixton Academy and Shepherds Bush Empire – plus a network of regional outlets including Birmingham, Glasgow, Newcastle, Liverpool, Bristol, and the soon-to-be-opened Oxford Academy.

The CC blocked LN-Gaiety’s initial approach for AMG on the grounds that it would provide too much control of London’s mid-sized venue market, stalling the deal until Paul Latham, president of the company’s U.K. music and venues operation, could hive off a couple of rooms.

"The venues that we are acquiring are among the best in the world," said Live Nation chief exec Michael Rapino in a March 30th company statement.

"AMG has one of the strongest live music venue brands in the U.K. The acquisition of AMG will enable us to grow our U.K. venue network with a brand that music fans know and love."

LN-Gaiety bought the stock from the RJD Partners investment group, which has had equity in Academy since it helped fund the £33.5 million management buyout of the old McKenzie Group that AMG chief John Northcote orchestrated in 2004.

The deal may also be the springboard for further talks between LN-Gaiety and MAMA or other parties regarding some of the other smaller Mean Fiddler Music Group outlets it acquired when LN-Gaiety bought the Vince Power-run empire in 2005.

Fringe and boutique rooms with capacities of less than 1,000 don’t really fit the LN-Gaiety business profile. There’s little doubt that Latham would have happily let them go and hung on to the 3,600-capacity Apollo if it would be enough to keep the CC happy.

MAMA co-chief exec Dean James, also a former Mean Fiddler chief exec, knows the outlets so well that his company is always likely to be in the frame as a potential purchaser, although several other parties may be interested in a £7.5 million job-lot of London venues or even cherry-picking individual ones.

James and his AIM-listed company has the management of rapidly emerging U.K. acts including Franz Ferdinand and Kaiser Chiefs and assets including the Channelfly rock venue business, and it’s known to be looking to expand.

Last summer it made an unsolicited all-shares bid for the beleaguered Sanctuary Music Group, another AIM-listed outfit, but had it knocked back because the London-based company’s board said it wasn’t worth taking seriously.

As MAMA and LN-Gaiety, through Live Nation, are both stock-listed companies, any negotiations would likely be conducted under the same veil of secrecy as the Apollo and Forum talks and would probably take at least three months.