German media giant Bertelsmann AG has enough cash to buy the shares it does not own in record company Zomba – home of Britney Spears and ‘N Sync – if founder Clive Calder ever decided to sell, the Financial Times reported on Monday.
“Not only would we have the money, but I would be very happy since it is one of the most profitable record companies around. It would be a great asset for us,” Bertelsmann Chief Executive Thomas Middelhoff told the paper.
“If you consider the kind of valuation on which a company like (British music group) EMI is trading, it is clear that (Zomba) would be one of the cheapest and best quality assets to get on the market at the moment,” he said.
Bertelsmann’s North American-based music arm, Bertelsmann Music Group (BMG), is understood to be subject to a put option from Calder, which could force it to buy his remaining stake in Zomba for somewhere between eight and 12 times profit, or about $3 billion, the FT reported.
BMG already owns 25 percent of Zomba’s publishing business and 20 percent of its record division.
Separately, German business newspaper Handelsblatt quoted BMG Chief Executive Rolf Schmidt-Holtz as saying his company had not yet given up its interest in a possible link-up with EMI.
In May, EMI and Bertelsmann called off long-running talks over a music merger after failing to solve regulatory problems.
“If the EU Commission had seen the situation of the music industry then as it is today, then it would have decided differently,” Schmidt-Holtz told the paper.
He said the two sides were constantly in contact but declined to say if negotiations were under way.