MCA is considering a plan to sell about 15% of its music entertainment group to the public in an initial public offering that might raise $100 million to $130 million, sources said.
President and Chief Operating Officer Sidney J. Sheinberg confirmed that the Los Angeles-based company is weighing the merits of offering "less than 20%" of the group to the public, but he declined to place a value on the music entertainment holdings.
The purpose, Sheinberg said, would be to "put visibility on it and have its value appreciated" by Wall Street, as well as to raise funds that could be used for acquisitions or other corporate purposes.
In addition to recorded music, the group includes music publishing, the Universal Amphitheater, Facility Merchandising Inc., Front Line Management, MCA Radio Network, and the distribution arm for MCA's home video products. The group could generate an estimated $40 million in operating income this year, according to Mara M. Balsbaugh, a securities analyst with Smith Barney, Harris Upham & Co.