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Warner to Acquire Christian Label

November 27, 2001|Bloomberg News

AOL Time Warner Inc.'s Warner Music Group, whose artists include the Red Hot Chili Peppers and heavy-metal group Metallica, will buy Gaylord Entertainment Co.'s Christian label for $84.1 million in cash.

Gaylord said the sale of its Nashville-based Word Entertainment business is expected to be completed in January, and proceeds will be used to pay down debt. The company expects the majority of Word's employees to be retained by Warner Music, Gaylord said.

Warner will add Gaylord's Christian music label, whose roster has included Amy Grant, the Judds and Kenny Rogers, to its list of more than 1,000 artists, which includes Kid Rock, known for rap albums such as "Devil Without a Cause."

Nashville-based Gaylord is selling and eliminating divisions as it focuses on more profitable hotel and entertainment businesses.

The shares of Gaylord rose 44 cents to $21.64 on the New York Stock Exchange. They had dropped 8.8% in the last year. AOL Time Warner rose 61 cents to $37.37, also on the NYSE.

Deutsche Banc Alex. Brown Inc. was Gaylord's financial advisor in the sale, the company said. Malcolm Mimms will continue as president and chief operating officer of Word Entertainment.

Gaylord had $371 million in total debt as of Sept. 30, spokesman Dan O'Connor said.

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