Most Innovative Company Warner Music Group, which we profiled in our July issue, is reportedly up for sale. According to Reuters, WMG has hired Goldman Sachs as an advisor for a possible acquisition by private equity firm Kohlberg Kravis Roberts.
Following rumors of the sale, shares of WMG rocketed 23%. Is the market simply chasing false leads, or is there some truth to the acquisition reports?
Warner Music Group declined to comment on the matter.
But while WMG’s board was approached by a private equity firm, it is not currently up for sale. The board is likely testing whether the offer is fair market value. In order to do so, there must be a formal process, which would explain the hiring of Goldman Sachs.
WMG is the world’s third-largest record label behind Universal and Sony. In recent years, the company has overhauled its business model and made significant inroads in the digital music market. Digital revenue represented 40% of its recorded music revenue in the U.S., WMG said in its most recent earnings call.
We’ll keep you posted when we have more details.AC