Bertelsmann joint venture to pay �107m for music publisher with rights to songs by David Bowie and Michael Jackson
Music publisher Chrysalis, which has a back catalogue including the rights to songs by artists such as David Bowie and Michael Jackson, today agreed a �107.4m takeover by German media giant Bertelsmann and a private equity firm.
Chrysalis is being bought by BMG Rights Management, a joint venture between Bertelsmann and private equity firm Kohlberg Kravis Roberts that has a catalogue of more than 200,000 songs and recordings by artists including Coldplay, Britney Spears and Westlife.
At 160 pence per share, the deal represents a 45.5% premium over Chrysalis's closing price on 29 October, the day before it said it was in takeover talks.
The company's share price opened at 161.5p and hit a 52-week high of 172.5p following the announcement of the deal. By late afternoon it had settled back to 158.5p, a 0.16% drop.
Chris Wright, the chairman and co-founder of Chrysalis, said that the deal "marks the end of one era and the start of another".
"Our continued progress, evolving from management, recorded music, television and radio to focus on music publishing, has been clearly recognised by BMG," he added. "I am proud of both our track record and our future prospects in an industry in which we have both innovated and pioneered."
Wright has been invited to join the supervisory board of BMG Rights Management and become its UK non-executive chairman.
Bertelsmann, which also owns book publisher Random House and broadcaster RTL, was the owner of one of the five music "majors" until the end of the last decade.
However, a need to reduce debt saw Bertelsmann sell its songwriter's catalogue to rival Universal, and offload its recorded music division to Sony in 2008.
The German company formed BMG Rights Management after the Sony deal and has grown its catalogue with a series of deals in the past year.
Hartwig Masuch, the BMG chief executive, said that the deal was "an important step forward" in building its global music rights business.
"Chrysalis's extensive and high-quality catalogue represents an excellent fit with our existing business," he said.
Chrysalis, founded in 1969, has a 70,000-strong catalogue of music copyrights and operates in areas of music publishing, music recording, artist management and entertainment product distribution. Chrysalis used to own a record company of the same name before it was sold to EMI in 1991.
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Source: http://www.guardian.co.uk/media/2010/nov/26/chrysalis-takeover-bmg-bertelsmann
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