Following on from the news that Sean Parker was readying himself for a bid on the Warner Music Group, Music Week has revealed that Bertelsmann is also looking to buy not one, but two music giants – namely WMG and EMI.
The music industry weekly quotes Bertelsmann's chief financial officer, Thomas Rabe, as saying that the goal is to transform BMG into one of the world's leading music rights companies, as well as being a major player in other areas, including book publishing and broadcast (BMG own the German TV station, RTL and the Random House publishing firm). If the company succeeds in buying both Warner and EMI, it will become a global leader in music rights.
Following a default on loan payments, Citigroup took control of EMI earlier this year and Bertelsmann sees this as a good opportunity to step in. "One can assume a bank will not run a music business and that it will be on the market," he said. "We’d look at both company’s music-publishing businesses."
Bertelsmann already stands as the fifth largest music company in the world and Music Week states that the company is set to double its revenues by 2015. To get an idea of the scale of the purchases the German media company is hoping to make, EMI alone owns 1.3 million rights, compared to Bertelsmann's 300,000.
One important proviso on any potential purchases, however, will depend on no development of a bidding war. BMG's chief executive, Hartmut Ostrowsk, has made it clear that there will be no overpayment for the companies, learning well from the lesson of Guy Hands' Terra Firma, which paid £4.2 billion for EMI – a gross inflation of the company's worth that saw the collapse of the takeover and the default to the Citigroup.