It seemed Warner Music Group had lucked out back in April with so many bidders showing interest in purchasing the label. Reports were even saying that the bidding price at the time was near $3 billion. But with the first week of May upon us and no purchase made yet, new reports are saying that WMG has been making the acquisition relatively difficult, driving many potential bidders away.
One unnamed potential bidder told Digital Music News that WMG has been making it very difficult for the potential bidders, telling them “The level of incompetence surrounding this acquisition at all levels is staggering.” This bit of insight comes as the Yucaipa Companies (featuring Ron Burkle and Sean Parker) pulled out of the race, meaning we’ll never get to see the irony of a Napster co-founder owning a record label come to life. In addition, one bidder, Russian billionaire Len Blavatnik, is apparently so impatient with the dragged out process he reportedly has been threatening to remove his bid.
While Blavatnik is reportedly still in the running, along with the Gores brothers and Sony/ATV Music Publishing, the difficulties WMG appear to be causing is not helping the already dragged out process. It might be possible the stirring is caused by WMG’s persistence that bidders purchase both the recording and publishing divisions. Seeing how low albums sales are as of late, it’s understandable if bidders are more reluctant to purchase both divisions rather than just the publishing one (the real money maker).
But the exact reasoning behind what appears to be a breakdown in negotiations is still unclear. We’ll keep you posted when more develops.
