Suitors likely to serenade BMG

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Bertelsmann’s decision on Thursday to unload its music publishing business is expected to bring out a range of eager suitors.

Bertelsmann hopes to fetch upwards of €1.5bn ($1.9bn) for BMG Music Publishing, the industry’s third-largest firm.

The process is expected to move quickly, with advisers pushing to clinch a deal by the end of the summer.

One likely bidder is Universal Music. Although it is the largest music company, it trails EMI and Warner in the publishing business, which its executives have identified as a key growth area.

Elevation Partners, the private equity firm co-founded by U2 singer Bono, is also considered a contender, as is Viacom, which owns the Famous Music publishing business.

An offer from Sony is considered less likely because of its recent feuding with Bertelsmann for managerial control of their recorded music joint venture, Sony-BMG Music.

The auction could be marred by the possible sale of another music publishing business. Three weeks ago, EMI, the third-largest music company, offered $4.2bn for rival Warner Music. If a deal were to be completed, it is widely expected that it would have to sell one of its music publishing businesses in order to satisfy regulators. “There could be a logjam,” one record executive said.

Music publishing was long considered the less glamorous side of the record industry. Its practitioners earn small amounts of money when their songs are used in television commercials, films, elevators, live shows and a host of other formats.

However, the business has gained broad appeal for its resilience and predictability at a time when the music industry has been ravaged by piracy and declining CD sales.

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