Sony Corp. has held preliminary talks to buy a majority stake in EMI Music Publishing, according to a report published in Bloomberg on the weekend.
Abu Dhabi-based Mubadala Co. holds a majority share in the publishing giant and is said to want out. The sovereign wealth fund is reportedly dangling its stake for some $4 billion, with the likes of Sony and various unnamed entertainment groups and potential financial bidders engaging in talks, unidentified sources tell Bloomberg.
Sony/ATV already owns almost 40 percent of EMI Publishing and handles most of its day-to-day operations.
As the streaming sector grows and services such as Spotify and Apple Music explore new markets which, for many years were ignored or seen as “too difficult” to extract meaningful revenue from, Mubadala figured now was the right time to sell.
“Mubadala has signaled its intent to sell its majority holding, the people said, and plans to exercise an option that would force Sony to acquire its stake or trigger a sale of the entire company,” notes Bloomberg. “While that process can’t formally begin until the end of June, the people said, Mubadala is already reaching out to interested parties to gauge pricing.”
Speculation on a sale has been rumbling on for the past year. If the seller gets close to its asking price, it’ll mark the biggest transaction in the music space since Guy Hands’ Terra Firma group took control of EMI Group in May 2007 for $US4.7 billion.
Terra Firma’s acquisition spelled the beginning of the end for EMI, the once proud British icon and music major which over the next five years would be carved up and its assets sold off. In 2012, Sony/ATV Music Publishing chairman Martin Bandier led the charge to buy EMI Publishing in a deal valued at $2.2 billion.
When that mega-deal went down, Sony and its then partner the Jackson Estate jointly snagged 40% with the remaining 60% understood to be owned by finance partners, including Mubadala, along with Jynwel Capital, the Blackstone Group’s GSO Capital Partners LP and David Geffen. Sony Corp. has since agreed to buy out the Michael Jackson estate’s 50 percent interest in Sony/ATV, giving it total control of the music publishing company.