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Sale of Warner Music Group appears imminent

The company's shares surge more than 6%. Russian-born billionaire Len Blavatnik has emerged as the leading candidate to buy Warner Music.

May 06, 2011|By Alex Pham, Los Angeles Times

Warner Music Group Corp.'s shares surged more than 6% as rumors of an imminent sale of the New York music company reached fever pitch.

Its shares, which rose 48 cents to $7.90 on Thursday, are up 67% from Jan. 20, the day before the New York Times reported that Warner Music was fielding bids.

Warner Music, which declined to comment on the speculation, has been entertaining multiple cash offers — some exceeding $3 billion — since it hired Goldman Sachs late last year to coordinate a potential sale of the company, according to sources familiar with the auction process.

Leading candidates include Russian-born billionaire Len Blavatnik; Sony Music Entertainment; investment firms Platinum Equity and Kohlberg Kravis & Roberts; and Beverly Hills concert promoter Live Nation Entertainment Inc., among others.

Blavatnik, who sat on Warner's board from 2004 to 2008, emerged this week as the top candidate, according to reports from Reuters, Bloomberg and the Wall Street Journal.

Born in Moscow, Blavatnik made his fortune in oil and was estimated by Forbes to be worth more than $7.5 billion, making him the 93rd richest person in the world in 2010. Educated at Harvard University and Columbia University, Blavatnik became a U.S. citizen in 1981. A call to Blavatnik's spokeswoman was not immediately returned.

The industrialist turned his attention to entertainment last year, vying to buy movie studio Metro-Goldwyn-Mayer before withdrawing his bid last May. He ended up investing $25 million to $100 million in Weinstein Co., the movie company founded by brothers Bob and Harvey Weinstein.

Ultimately, the winner of Warner Music will be the bidder offering the most cash, according to sources familiar with the auction. Warner Music Chief Executive Edgar Bronfman Jr., whose family made its fortune as liquor distillers under Seagram Co., has a reputation as a consummate negotiator. Bronfman reportedly just purchased a New York penthouse for $15.9 million, less than half the original asking price, according to Bloomberg.

Warner Music's board of directors met Thursday to decide on a buyer, according to a person familiar with the matter, with an announcement of a sale likely to be made over the next few days.

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