Bertelsmann Moves to Avoid IPO

28 March 2006

Europe's largest media group Bertelsmann is reported to be selling off its 50% stake in music company Sony BMG as it tries to avoid a public listing [WAMN: 24-Mar-06].

The family-controlled business is under pressure from significant minority shareholder Groupe Bruxelles Lambert's plans to float its 25.1% stake, valued at around €5 billion ($6.01bn; £3.44bn).

The combined value of German-headquartered Bertelsmann's Sony BMG stake and of its wholly-owned BMG Music Publishing operations is around €2.9bn to €3.3bn.

But the media group could face a difficult task disposing of the Sony-partnered assets. The Japanese electronics giant may be reluctant to exercise its option to invest more in media while its electronics arm is struggling.

Bertelsmann will then have to sell to another group willing to go into partnership with Sony, or persuade it to also sell its stake.

Neither company is willing to comment.

GBL, meanwhile, is unmoved by Bertelsmann's manoeuvrings and is sticking to the statement it made in January that it would seek to list its stake.

Data sourced from Financial Times online; additional content by WARC staff