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Live Nation jumps into the bidding for Warner Music Group

March 31, 2011 |  5:27 pm

Live Nation Entertainment Inc. has dived into the bidding for Warner Music Group, which now counts a dozen or more suitors.

The bid from Live Nation, first reported in the Wall Street Journal and the New York Post, is for the recorded music portion of Warner. Warner also operates a music publishing business called Warner/Chappell, whose catalog includes works by Cole Porter, Madonna, Led Zeppelin, Katy Perry and others.

Irving Azoff The surprise offer from Live Nation puts the publicly traded Beverly Hills company in an awkward position. Its executive chairman, Irving Azoff, a veteran personal music manager, has publicly denied being interested in buying Warner. Azoff's talent management business represents a number of top recording artists, including Christina Aguilera, 30 Seconds to Mars, Van Halen and Josh Groban.

A spokeswoman for Live Nation declined to comment on the matter.

If accepted, Live Nation's proposal potentially faces serious regulatory challenges. The company went through extensive, yearlong government scrutiny when it merged with Ticketmaster. Regulators had questioned whether Live Nation, the nation's largest concert promoter, would have too much market power once it combined with Ticketmaster, the largest event ticketing service. The company ultimately prevailed, closing its merger in early 2010.

Aside from Live Nation, other bidders to buy all or parts of Warner include Sony Music Entertainment, oil baron Len Blavatnik, supermarket magnate Ron Burkle, buyout firm Kohlberg Kravis Roberts & Co. and private equity investor Platinum Equity, according to an executive knowledgeable about the offers.

Warner engaged investment banking firm Goldman Sachs to wrangle the bids late last year when it received an unsolicited buyout offer from KKR, which created a joint venture with Bertelsmann called BMG Rights Management. KKR's initial bid was increased in recent weeks to compete with more generous offers from rival bidders, said a person familiar with the bid.

Warner's board of directors is expected to whittle down the number of bids within the next several weeks and could make a final decision by the end of April, according to a person familiar with the sale process. 

-- Alex Pham


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Photo: Irving Azoff. Credit: Jonathan Alcorn / Bloomberg.