Did I tell you that Bertelsman had reached an agreement with their minority shareholder Groupe Bruxelles Lambert to buy them out for 4.5 billion euros so that GBL wouldn't, as they had threatened, float their 25.1% share on the stock market? I can't remember. Well they did, and they have now selected Barclays Capital, BNP Paribas, Deutsche Bank AG and Royal Bank of Scotland Group Plc to manage the loans they are going to have to take out to cover the costs of the venture.
Also contributing towards the costs of buying out GBL, of course, is the previously reported sale of Bertelsmann's BMG Music Publishing company. Sony, Universal and a number of venture capitalist types are all said to be interested in buying the publishing firm, as is Edgar Bronfman Jnr over there at Warner Music.
According to The Business, Warner's top team have been looking into a takeover of BMG Music Publishing for some time. BMG's publishing assets would make Bronfman's Warner Chappell into a publishing powerhouse. What's more, if EMI were to succeed in a takeover of Warner Music they would most likely be forced to sell Warner Chappell to satisfy competition officials (given the size of EMI's existing music publishing company) and some commentators reckon Bronfman has designs on maintaining ownership of the publishing company in any EMI/Warner deal, hence his interest in expanding its size.
Not that the EMI takeover of Warner Music is a foregone conclusion of course. The FT reports that while Bronfman awaits the next takeover offer from EMI, he is also busy courting those well-off investment types about the possibility of Warner attempting a takeover of EMI. Bronfman, rumour says, isn't overly keen on bowing out of the music industry, but doesn't see himself having a long future at any mega-major created by an EMI takeover - but if Warner was to take over EMI, well, then he'd be in charge. That said, cynics say Bronfman is unlikely to raise anywhere near the capital that would be required for such a move, so he'll probably have to make do with the aforementioned Warner Chappell plan. Or, of course, he could make do with his current lot and knock back any further EMI takeover offer.
EMI, it seems, are actually prepared for the Warner deal to not come off. While they plan to make one more bid for the company, they don't want to be forced into paying too high a price for Warner. Should their next bid be unsuccessful (and the consensus is that one of Bronfman's current investors will have to break ranks for EMI to have any chance of getting their takeover plans through) then EMI reckon they have other options for takeover-style expansion other than Warner Music. Some say Vivendi may still sell off some of its Universal music assets (though given how much Universal's successes have helped Vivendi overcome those past financial problems, they would be mad to do so) and then there's still Bertelmann's stake in SonyBMG.
Now, of course, Bertelsmann seem to have opted to sell their publishing firm rather than their 50% stake in SonyBMG in their bid to raise that GBL-buy out money. However, The Times reports that Bertelsmann is still trying to renegotiate its current five year JV deal with Sony Corp which stops either side from selling out without the others express agreement until 2009. Negotiations which might suggest Bertelsmann still see a SonyBMG sale as an option - just a medium term rather than short term one (ie to pay off some of those hefty loans they're about to take out in a year or so).
So, perhaps EMI will still, as yet, have the option to buy half of SonyBMG. Or perhaps they should just go with our advice, end their obsession with the traditional recording business, and merge with Live Nation - integrated operations, that's the future.