Warner Music Sells Itself to Access For Billions

Warner Music sold itself to Access for $3.3 Billion dollars.  Warner music is the worlds only publicly traded major music company. WMG, was involved in the recorded music business and the music publishing business.  As well, WMG is recognized as holding the best known labels such as Asylum, Atlantic, Cordless, East West, Elektra, Nonesuch, Reprise, Rhino, Roadrunner, and Rykodisc.  Also, WMG was involved with artist services as the following: artist management, merchandising, touring, fan clubs, VIP ticketing, sponsorships, and brand endorsements. Therefore, one can see how WMG was the world's largest recorded music business, and one of the musics most successful companies.
       On Friday April 29,2011 Warner Music Group (WMG) agreed to sell to the investment vehicle to the Russian billionaire Len Blavatnik for approx $3.3 billion dollars.  Therefore, Access Industries will pay $8.25 a share for WMG and this is a 4.4 % premium to company's closing price of $7.90. Also, its 34% higher than WMG's avg share price over last 6 months.
      
       However, I feel that this is very exorbitant and a huge gamble to Access Industries to buy WMG and its debt of 20 million dollars in these hard economical uncertainty, and the obvious decline of CD sales has hurt the music industry tremendously.    As well, with all the digital downloads of music its a very risky undertaking to buy WMG even though it is one the worlds most successful companies.  Thus, I'm assuming there's more to this takeover than meets the eyes as WMG has one the world's leading publishers with the music catalog of more than 1 million songs from 65,000 songwriters.  This is a huge guess but Access may be planning on selling some those rights to songs to make extra revenue? Therefore, this would be a good plan as more artists are selling the right to their songs for money due to these new times of piracy and illegal downloads of music across the internet.
        In concluding, it will be interesting to see how Access takes the company into the future and makes the company profitable.  


De la Merced, Micheal J., & Sisario, Ben. (2011, May 6). Warner music is sold ending a long auction. Retrieved from http://dealbook.nytimes.com/2011/05/06/warner-music-to-sell-itself-to-access-for-3-3-billion/?smid=tw-nytimes&seid=auto