May 19, 2024

DealBook: Warner Music Nears a Sale to Access

11:15 p.m. | Updated

The Warner Music Group is near a sale to an investment vehicle of Len Blavatnik, the Russian-born investor, people briefed on the matter said Wednesday, as the auction process for the music-label giant was drawing to a close.

The offer by Mr. Blavatnik’s Access Industries values Warner Music at more than $3 billion, these people said, cautioning that no deal has been finalized and other bidders may emerge on top.

Warner Music’s board is scheduled to meet on Thursday to select the winning bid, these people said.

Among the other suitors still in the race are a pair of brothers, Tom and Alec Gores, who run their own private equity firms, these people said. Also in the running is a group led by Sony/ATV Music Publishing and Ronald O. Perelman’s investment vehicle, MacAndrews Forbes.

Others that had participated in the bidding included the billionaire Ronald Burkle and BMG.

But Mr. Blavatnik, whose investments have ranged from oil and chemicals to media companies, had been seen by many as a leading candidate from the beginning. He previously served on Warner Music’s board; he is close to the company’s chairman, Edgar Bronfman Jr.; and he remains an investor in the company.

Some other would-be bidders dropped out in recent weeks, complaining that the auction seemed likely to lead to a win by Mr. Blavatnik regardless, according to people involved in the process.

Others have grown concerned about Warner Music’s financial health, given the uncertain prospects for the music industry and the company’s roughly $2 billion of long-term debt. Lenders to several suitors, including the Bank of America, had grown uneasy about providing financing for a deal.

Representatives for Warner Music and Mr. Blavatnik were not immediately available for comment.

Warner Music put itself up for sale early this year amid strong interest from potential bidders.

While some suitors proposed splitting the business into its two parts, the music label and its valuable publishing arm, Warner Music’s board expressed a preference for selling the company as a whole.

Shares in Warner Music closed on Wednesday up 0.7 percent, at $7.42.

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