Blavatnick Closer To WMG?

Billionaire Len Blavatnik is close to snapping up Warner Music Group in a deal that values the company at $3.3 billion, according to the New York Post.

Earlier this week UK papers including the Sunday Times had the Russian-born businessman, 93rd in Forbes’ World’s Billionaire’s List with an estimated fortune of $7.5 billion, vying with a group headed by Tom Gores’ Platinum Equity and Alec Gores’ Gores Group.

The Post story says the bid from Blavatnick, who already has 2 percent of Warner and holds a seat on the board, is well above what anyone else has put on the table.

The others believed to be in the frame to buy WMG, particularly Sony and a partnership between BMG Rights Management and Universal Music Group, could well face regulatory issues if their bids were successful.

The independent music companies have warned U.S. bank Citigroup it faces a rough ride if it tries to sell EMI to another major label, and there’s no reason they won’t take a similar stance over the sale of Warner.

Victory for Blavatnick could be good news for WMG chief exec Edgar Bronfman Jr.

The two are known to be good friends, Blavatnik bought Bronfman’s New York town house in 2007, and many UK business writers are speculating that they may now take a tilt at EMI.

Citigroup is reportedly looking to end its $3.6 billion EMI lending disaster and Warner would have new capital.

That deal would also face regulatory issues but the European Commission has become more lenient in its application of monopolies laws than it was 11 years ago, the last time Warner tried to buy EMI.

Analysts believe a merger between WMG and EMI, which has been attempted several times in the past, could yield hundreds of millions of dollars of cost savings.