According to top read the Financial Times, Universal Music owners Vivendi are currently the favourites to win the race to buy Bertelsmann's music publishing company, which, as previously reported at length, the German conglom put up for sale last month in a bid to pay for its recent high profile share buyback.
Fifteen companies are said to have bid for the publishing firm, including other music and media conglomerates as well as a number of investment consortiums. Bertelsmann confirmed last week that it had picked five preferred bidders from the fifteen. According to the FT, unsuccessful bidders included Viacom, financial firm Permira, and a proposed management buyout. Vivendi, Warner and private equity group BC Partners are reportedly in the final five.
Bertelsmann are said to be looking more favourably at takeover proposals from existing music companies because of the cost savings that can be achieved by merging BMG Music Publishing with an existing publishing house. Such a merger may, of course, lead to regulatory problems because it would require the approval of the European Commission, and pan-European trade body IMPALA, in buoyant mood following its win in the European courts over the SonyBMG merger, has said it will fight any attempts to merge BMG Music Publishing with an existing publishing major. Bertelsmann says it believes that there will be no regulatory issues in the sale of its publishing firm, though Vivendi might be a preferred buyer for tactical reasons - while the Universal Music Group is the biggest music company in the world, its publishing business is smaller than that of some of its rivals.