GERMANY - BMG auction to attract private equity

The company is expected to generate strong interest from both private equity houses as well as media companies.

It is understood that Elevation Partners, the private equity house that was co-founded by U2 singer Bono, is considering to bid for the company. Viacom and Universal Music are also expected to make an offer. An offer from Sony is however considered to be less likely, as the company recently clashed with Bertelsmann over the managerial control of their recorded music joint-venture, Sony-BMG Music.

Although the auction process is expected to move quickly, it could be marred by EMI's $ 4.2bn offer for Warner Music. If this transaction were to complete, it is expected that it would have to sell one of its music publishing businesses as well, in order to satisfy regulators, which could potentially diffuse interest for BMG.

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