Has Sanctuary Found a Savior
Sanctuary, the world's largest independent record label, had a terrible 2005. It issued four profit warnings. Severe delays in key album releases hit profits, particularly at its Urban division run by Matthew Knowles, father of Destiny's Child singer Beyonce.To survive it must now reduce its £134m overdraft with the Bank of Scotland. A £130m rescue rights issue is said to be on the cards and must be nailed down by the end of the month when the group's results are due.
Thompson buying, say, a 20% stake would, in the short term, help bolster the share price and assist broker Evolution's hard task in raising much needed cash. Long-suffering shareholders, including Dutch media tycoon and billionaire John de Mol with 19.5%, Goldman Sachs (11.3%) and Fidelity (9.8%) are all sitting on big losses. Perhaps Thompson has been persuaded to get involved by Sanctuary director Jim Driscoll. The latter is also chairman of intellectual property rights company Galleon (unchanged at 12½p),
in which Thompson was once a major investor. Both have worked in tandem before and could have a life-saving break-up plan for Sanctuary up their sleeves.