Warner Music Group, (“Warner”), one of the music industry’s most successful companies, recently hired Goldman Sachs to assist in its buyout strategy. Reports indicate that in the last week of February, Warner requested bids for its music publishing company, Warner/Chappell, as well as for the company as a whole.

Many have speculated about the underlying reason(s) for Warner investors’ decision to request bids. An unknown source told Hollywood Reporter that Warner would rather sell Warner/Chappell so they can make a bid for all of EMI when it comes up for sale. This reason is indeed consistent with Warner’s continuous efforts to acquire EMI over the past decades. Warner investors would obviously have great difficulty owning Warner and acquiring EMI due to antitrust regulations. Therefore, selling parts of, or the whole company, would be the obvious solution to that problem. Since EMI has consistently played a lead role in the music publishing business, even during the transformation into the digital world, Edgar Bronfman and Warner investors are predators for the company.

Currently, Warner is in its second round of bids. According to bidders, the company is worth approximately $3 billion, with the music publishing company accounting for nearly $2 billion of the total amount. Bidders include parties such as Sony Corporation (who only wants a part of the business), Platinum Equity, and Len Blavatnik. Sources indicate that Ron Burkle, head of the Yucaipa Companies investment firm, is in the lead. BMG music publishing is among the bidders for the music publishing part of Warner. As of now, it looks like the bidding will end in the next few weeks and a decision will be made in April. With that said, the results of the Warner buyout and the highly anticipated EMI sale should be quite interesting. Continue visiting fortherechord.com for more updates on the Warner sale.