From the Daily Telegraph newspaper in the UK comes news that the troubled Sanctuary Records has been bought by the worlds biggest music compnay:
Sanctuary, the troubled music group that started life managing Iron Maiden, has been bought by Universal Music, the world's biggest record company, in a £44.5m deal.
Universal has agreed to pay 20p per share for Sanctuary, which is the UK's biggest independent record label and manages artists such as Sir Elton John and James Blunt.
Universal, which is part of Vivendi, the French media conglomerate, is particularly keen to snap up Sanctuary's profitable merchandising, artist management and live agency business. advertisement
Recorded music companies have been hit by the growth of illegal music downloads and are eager to diversify into more healthy parts of the music industry such as management and merchandise.
Universal will have to take on Sanctuary's substantial debts of £60m, which have swelled as the group struggled over recent years.
The company has lost three-quarters of its market value over the last three years as it has suffered from delays at its loss-making Urban Records division.
Sanctuary, which was named after the eponymous Iron Maiden song, was set up in 1976 by Andy Taylor and Rod Smallwood, who met while studying at Trinity College, Cambridge.
Mr Taylor, the then chief executive, was removed as a director last year following a dispute over accounting policy.
Mr Smallwood left the company in November, taking Iron Maiden with him.
Bob Ayling, the former British Airways chief executive, was brought in as chairman in 2005 after the company came under pressure from the City following a £110m loss.
Recommending the Universal offer, he admitted today that: "The past few years have proved to be a very difficult time for Sanctuary and a very disappointing one for its shareholders."
He said the new board had made progress over the last twelve months but insisted that, unless the Universal deal goes through, "growth and profitability will continue to be hampered by the Sanctuary Group's present capital structure and by industry factors."
Doug Morris, Universal's chairman and chief executive, said: "The Sanctuary business will be a good strategic fit for us. We have a great opportunity to strengthen and advance Sanctuary's position as a significant player in artist management, agency and merchandising, as consumers' appetite for music grows worldwide."
Universal said it would work with Sanctuary's chief executive Frank Presland, who brings direct experience of the artist management business.
But it is not yet known how Universal is planning to turn around Sanctuary's underperforming record label.
The growing challenge from the internet has spurred a series of big deals in the music industry over recent years.
EMI has agreed to a £2.4bn takeover from Terra Firma, Guy Hands' private equity group, although Warner Music could yet seek to trump that offer.
Meanwhile, the 2004 mega-merger between Sony Music and BMG is still awaiting approval from European regulators.
