Looks like the music industry may not be on life support after all, if the bids to buy Warner are any indication. “We’ve been a little surprised by the robust mess of this auction, given the well-chronicled problems of the music industry,” said Tuna N. Amobi, a media analyst at Standard & Poor’s Equity Research. “It seems that the company is open to all kinds of scenarios.” There are at least 10 investors showing interest .
There have been at least 10 investors invited to submit bids which have averaged around 3 Billion for the legendary Warner Music Group corporation and its affiliates. The board at Warner is expected to review the offers and make a decision by early next week. Analysts state that the global revenue for the music industry have fallen 42% since the end of the 90s. Digital sales are increasing but not enough to offset the loss of CD sales.
Some analyst are bearish on the purchase price stating it’s simply too high but the news of the bids has helped Warners stock prices which recently traded at less than $6 a share, the stock shot up near $8 on Thursday afternoon after CBNC reported that Yucaipa was bidding $3 billion, before the share price closed at $7.52, a daily gain of 8.7 percent. On Friday it fell slightly, to $7.45. (CNBC did not cite a source for its report; a Yucaipa spokesman declined to comment on Friday.)