Warner Music Plan: Buy or Be Bought

Warner Music Group, one of the four major record companies, has hired the investment bank Goldman Sachs to seek out potential buyers for the company, a process that will play out while Warner continues to explore buying the beleaguered British music giant EMI, according to dealbook.nytimes.com.

The decision to hire Goldman Sachs came after several suitors, including the buyout firm Kohlberg Kravis Roberts, approached Warner Music’s management in recent months about buying the company, according to an executive briefed on the matter who spoke only anonymously.

Instead of negotiating solely with K.K.R., the company’s management decided to begin a formal sale process by hiring Goldman, which has recently begun making pitches to financial investors and media companies about buying Warner.

One possible outcome of the auction is for Warner to sell not the entire company but only Warner/Chappell, its prized publishing arm, said a person with direct knowledge of the process.

Meanwhile, a separate set of bankers within Goldman has been working on a potential acquisition of EMI by Warner. Goldman has reached out to Citigroup, which owns a large amount of EMI’s debt and could soon control the company if it fails to meet its payments, according to executives involved in the process, who would speak of the confidential negotiations only anonymously.

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