All of Warner Music Group (WMG) May Be Acquired by KKR, BMG

A decision hasn't been made on the matter yet, but reports are the partnership of BMG and private equity firm KKR are contemplating making a bid for all of Warner Music Group (NYSE:WMG) after being turned down for its bid on the Warner/Chappell publishing arm.

Warner/Chappell is the company’s cash cow, since it has less overhead and a steady royalty stream. The rest entails more expensive contracts to manage performing artists like Led Zeppelin and James Taylor.

Private equity firms Bain Capital and Thomas H. Lee Partners are looking to exit the music business after buying the beleaguered company alongside chairman Edgar Bronfman in 2004. The consortium took WMG public in 2005, though they still own more than half the company, according to Thomson One. They also occupy eight of the company’s 12 board seats.

A bid for the whole company emerged from a team led by Ron Burkle’s Yucaipa Companies that supposedly includes an endorsement from media mogul Sean Parker, says a source familiar with the process.

Warner Music closed Monday at $5.51, up $0.07, or 1.29 percent.




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