Bidders Queue For Universal Castoffs

Twenty-two bidders are lined up to buy the bits of EMI that Universal will need to shed if it’s to get EC clearance for its $1.9 billion purchase of the British company’s recorded music business, according to the Daily Mail.

The paper’s business section reckons the European Commission has told Universal it will need to offload about £300 ($480 million) worth of EMI assets, including Parlophone, before the monopoly authority can approve the takeover.

The New York Post says the EC will set the bar a little higher by demanding Universal shifts £350 million ($560 million) worth of assets – the equivalent of a quarter of EMI – before allowing the deal.
 
It also says Universal has prepped for the sales by hiring Goldman Sachs and Bank of America as advisers. 
Apart from Parlophone, which has Kylie Minogue, Coldplay, and Radiohead and has been tipped by many as a label that Universal will have to offload, the Post says Chrysalis, the European rights to Mute, Ensign, and a couple of classical labels could also be on the block.
 
Neither the Mail nor the Post are mentioning whether Virgin will be put on the block, although various business papers have said Richard Branson and Patrick Zelnik, head of French label Naïve, were in cahoots to buy back the label Branson sold to EMI for £510 million in 1992.
 
“Looking into buying Virgin Records,” Branson tweeted July 17. “Great opportunity to recreate a dynamic independent label.”
 
This put the cat among the indie pigeons as Zelnik is a board member of IMPALA, the Brussels-based independent music companies association that’s set against anything that leads to a reduction in the majors. 
It appeared that Zelnik’s usually vocal opposition to major music company takeovers had been lessened by the fact that he and Branson, who are connected through Virgin France, might now benefit from one.
 
The other potential buyers for the Universal-EMI offloads have been variously named as Bertelsmann-KKR venture BMG Rights, Sony Music, Warner Music Group, Ron Perelman, Ron Burkle, and a few European indie label owners such as Ministry Of Sound chief James Palumbo and Daniel Miller, who is believed to up for buying back Mute Records.
 
Miller sold Mute, which has Depeche Mode, Moby, and Nick Cave, to EMI in 2002, and is another who has said that Universal’s purchase of EMI’s records business could be good for the independent sector.
 
Perelman and Burkle were reportedly interested in buying EMI when it was put up for sale last year.
 
On Sept. 7 Universal paid EMI owner Citigroup the $1.75 billion, 90 percent of the asking price, that it had agreed to hand over, whether the deal had received regulatory clearance or not.