Warner Music Group Corp. (NYSE: WMG) shares are halted on news that its auction process is over. Both CNBC and Bloomberg have reported on a higher bid than what was expected last week. Warner Music shares closed at $7.90 yesterday on a large gain on reports that a Russian-American industrialist named Len Blavatnik was in the bidding lead.
The reports indicated this morning that Blavatnik has won the bidding process for Warner Music Group and the buyout price is said to be $8.25 per share. The 52-week range is $4.00 to $8.15, but this was a $5.50 stock in mid-March and under $5.00 in mid-January.
The move will effectively mark the end of the public pure-play music studios, which have been under attack from independent labels started by musicians and under fire from the internet as artists have gone direct to consumers or through third-party distribution systems online. How many CD stores have you seen lately?
That this was a $25 and higher stock back in 2006 effectively has no merit today. That was then, and the world has changed.
As a reminder, until a full press release confirms the merger with both sides accepting terms we will not consider this a done deal.
JON C. OGG
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