Music News: Softbank bids $8.5 billion to buy Universal Music

Dust2

http://www.billboard.com/biz/article...market-leaders

Quote:

An $8.5 billion takeover bid of Universal Music Group (UMG) by Japanese telecoms group SoftBank some three months ago was rejected by Vivendi, the French media and telecom conglomerate that owns UMG, according to sources. The story was first reported by the Financial Times.

The report says that Vivendi has been under pressure to restructure its holdings as its stock shares have fallen 13 percent since early May. The French company, however, sees its music content holdings as an important part of its future strategy, according to one person familiar with the company's thinking.

Late last September, UMG completed its $1.9 billion acquisition of EMI to become the world's largest music label group. In Billboard’s recent mid-year market share numbers, Universal Music Group led the industry with a 37.6% share in albums plus track equivalents albums. That represented a seven-point percentage gain from the 30.1% it posted last year before it completed its acquisition of the majority of EMI assets. Sony Music Group came in a strong second with 29.6% in market share, which is up from the 28.9% it posted in the first half of last year.

Dust2

$2 billion premium but no deal

http://www.nytimes.com/2013/07/19/bu...rsal.html?_r=0

Quote:

Vivendi, the French media and telecommunications conglomerate, rejected an $8.5 billion cash bid from SoftBank for the Universal Music Group, even though it represented a premium of at least $2 billion more than some analysts’ estimates of Universal Music’s value, according to a person briefed on the offer.

Analysts expressed disappointment that Vivendi’s board did not accept SoftBank’s offer. Allan C. Nichols, a telecommunications analyst at Morningstar, valued Universal at about $5.8 billion after its EMI deal closed last year; Sanford C. Bernstein & Company’s estimate is $6.3 billion. “I think it’s crazy to have had that size offer and not taken it,” Mr. Nichols said. “It’s a shame for shareholders.”

If Softbank was successful, then 2 of the 3 major labels will be owned by Japanese companies.

Universal = French
Sony = Japanese
Warner = American

Mean Trees

I am sorry but I am currently doing economics but how can these oligopolies/monopolies fail? It is just too funny. Universal is seeing a dip.