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The list of potential buyers is thought to include BMG/KKR, Sony Music and Warner Music, as well as Ron Perelman, Richard Branson and various European indie label owners.
WHILE UMG AWAITS EU VERDICT, VIVENDI ITCHING TO SCORE $350M
IN ASSET SALES
Anticipating Approval, Bankers, Buyers Lining Up to Snag Divested Entities
In an increasingly tense situation resembling a courtroom vigil as a jury deliberates its verdict, the EU’s advisory committee remains sequestered in a confidential meeting debating UMG’s latest divestment package. Amid this drama, parent company Vivendi is already eager to unload upwards of $350 million in assets, the N.Y. Post reports.

When the advisory committee arrives at its verdict, that decision will be forwarded to the College of Commissioners for a final sign-off. Only then will the deal receive formal EU approval and be made public in a written statement.

Ahead of the sale, UMG has hired Goldman Sachs and Bank of America as advisers, sources tell Post media reporter Claire Atkinson. Music bankers interested in getting in on the deal are hoping to learn more details of the disposals, including territories, deal deadlines and whether the assets will be sold as part of a single auction or conducted separately. To that last point, most believe Universal will be able to get more dough by selling off assets piece by piece.

UMG reportedly delivered a $1.75 billion check to Citigroup—representing the agreed-upon 90% initial payment—last Friday (9/7). It now has to work to raise enough buyer interest to cover the cost of the deal. But that shouldn’t be too difficult considering the list of potential buyers, which is thought to include BMG/KKR, Sony Music and Warner Music, as well as Ron Perelman, Richard Branson and various European indie label owners.

Lucian has taken a bit of a black eye, but all will be forgiven if he can integrate the business,” one source close the process told Atkinson.

Another hurdle, sources told the reporter, is that the EC may look to have final say on who UMG can sell its assets to—though, as I.B. Bad pointed out last week, such a demand would exceed the Commission’s authority.

Ironically, the asset sales will ultimately reduce the $1.9 billion price tag for EMI, one that Vivendi can ill afford. Vivendi, which foots the bill, is looking for cost cuts of $1.26 billion.

Meanwhile, the FTC is likely to sign off on the deal without further concessions. David Balto, a former policy director at the FTC who dealt with music-related issues, told the Post that UMG “has a pretty clear glide path to clearance from here.” Balto explained that the feds are much more interested in whether consumers are harmed by higher pricing, while the EC is focused on leveling the competitive playing field.

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