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Bertie execs have set a price tag of $2.8 billion for their half of the company, though insiders the actual number will be closer to $1.5 billion given the current credit shortfall.
SONY-BMG ABOUT TO COME UNDONE
Bertelsmann Ready to Sell Its Share Back to Sony Corp.
The Sony BMG pairing is about to come undone.

A Bertelsmann supervisory board meeting will take place today to discuss the German media conglom’s sale of its 50% stake in the company back to Sony, with a final decision expected to be revealed by the end of the month, pending a similar meeting of the Sony Corp. board.

Bertie execs have set a price tag of $2.8 billion for their half of the company, though insiders the actual number will be closer to $1.5 billion given the current credit shortfall.

The original five-year joint venture agreement, struck in 2004, is due to expire in August 2009, but new Bertie CEO Hartmut Ostrowski, who took over this past January, reportedly wants to fast-track the sale.

Just last March, he listed his companies options as “taking over 100%, selling our 50% to Sony or continuing the joint venture,” but it looks like he now wants to get out as quickly as possible.

Any unraveling of the venture would have to be approved by the regulatory bodies in both Europe, where ironically, the original pairing is still being fought in the European Commission, and the U.S., which would be expected to take up to three months.

Each partner in the joint venture has right of first refusal in any attempt to spin off their half.

In addition, Bertie has agreed to sell its Direct Group unit, which consists of Columbia House, BMG Music Club and the Bookspan book club, to Phoenix-based private equity firm Najafi Cos.

The company lost $636.4 million on $1.39 billion revenue for the year ended Dec. 31, due to a $652 million in write-offs: $455 million due to impairment of good will and other intangible assets, and $197 million in restructuring and valuation allowances due to the merger of the record clubs with Bookspan. Without those write-offs, the merged company had $15.6 million in operating earnings before interest and taxes.

Record club sales were reportedly so weak that the company expected to discontinue that business by 2010, Bertelesmann said when it disclosed its year-end financial results.

The Direct Group management team, headed up by Stuart Goldfarb, will remain in place, according to Najafi CEO Jahm Najafi.

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