"The real question is: Do the Germans have the patience for a big regulatory fracas?"
——a media banker, to Tim Arango


Three of the Big Four Make the Cut, Along With Viacom and Some Guy Named Charlie
Looks like I.B. Bad’s hunches in his overview earlier this week were on the money. According to a story by Tim Arango in this morning’s New York Post, among the field of remaining bidders for BMG Songs following the first cut by Bertelsmann are UMG, EMI and WMG, along with Viacom and former publishing mogul Charles Koppelman, who’s working with buyout firm GTCR Golder Rauner. Koppelman is presently Chairman of Martha Stewart Living Omnimedia.

Bertie and its advisers, Citigroup and J.P. Morgan, fielded more than a dozen offers last week, Arango reports, after which it invited back a handful of prospective buyers, each of which bid at least $1.5 billion, with UMG said to be the most aggressive, true to its M.O. These suitors are attracted to the pubbery’s consistent profitability—it throws off annual revenue in the $100 million range.

Following I.B.’s line of reasoning, Arango wrote that “Some close to the process say Bertelsmann may be inclined to sell to a private-equity group or Viacom because of the added regulatory risk that would come with selling to Warner, Universal or EMI.” He quotes a media banker as noting, "The real question is: Do the Germans have the patience for a big regulatory fracas?"

EMI is working with Kohlberg Kravis Roberts, while WMG is operating in tandem with its usual suspects, Providence Equity Partners, Bain Capital and Thomas H. Lee Partners.