Warner Music Group Corp., the world's third-largest recording company with such artists as Eric Clapton, Michael Buble, Green Day, Metallica, and Bruno Mars was purchased by billionaire Len Blavatnik’s Access Industries. Earlier today the two sides announced the deal: a $3.3 billion all-cash buyout of the world’s third-largest music company. Blavatnik’s company will pay $8.25 per share for publicly-traded Warner, a 34.4% premium over the stock’s six-month average price. The Russian-American billionaire is no stranger to Warner and its management–he served on the company’s board from 2004-2008 and purchased a Manhattan townhouse from chairman Edgar Bronfman, Jr. in 2007 for $50 million.
The deal immediately opens the door to the possibility of Access Industries emerging as a serious bidder for record label EMI.
Blavatnik stated: “I am excited to extend my longstanding involvement with Warner Music,” Blavatnik said in a press release today. “It is a great companywith a strong heritage and home to many exceptional artists. I look forward to working closely with the many talented people within the company.”
Despite all the news stories, blog entries and numerous other articles about the falling of the "Empire Of Music", due to piracy, file sharing, Limewire, etc., if it was so, why would anyone be willing to put over $3 billion dollars into a company in a dying industry? What may be partially true, hasn't made the business insolvent to the point where it can't rebound and make a complete turn around. This has been proven by the rise of digital sale over the past several years, and the undeniable fact that this is giving birth to more and more digital and cloud based companies that want to capitalize off the resurgence of the industry.
Why do I say this? Even the remaining 4 majors knew that their business model would not be sustainable for the long haul, and this year, lead by SONY Music, launched a cloud based music portal "Music Unlimited" powered by Qriocity.
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