Access-Warner Music Investor Documents Reveal New Roles for Edgar Bronfman Jr., Lyor Cohen
Access-Warner Music Investor Documents Reveal New Roles for Edgar Bronfman Jr., Lyor Cohen

Showing beyond doubt that investor interest in the music industry remains strong, the Warner Music Group auction brought out 17 interested parties before 10 wound up submitting bids, according to a proxy statement filed with the SEC today.

In the end, the Warner Music Group board of directors chose to accept the bird in the hand, Access Industries' $8.25-per-share bid, rather than the bird in the bush, an $8.50-a-share, conditional offer from Sony, Guggenheim Partners and Ronald Perelman's MacAndrews & Forbes, which are identified as bidders B, J and L in the proxy filing.

The conditional offer was contingent on Sony's ability to sell the Warner Music recorded music operation to MacAndrews & Forbes. Also, that offer carried the risk of regulatory approval since Sony is one of the four major music companies.

After third-round bids came in, bidding continued right down to the wire, with Bidder F, Platinum Equity and the Gores Group, upping their May 3 bid from $7.65 to $8 a share the following day, May 4; and on May 5, the Sony consortium came in with $8.31 a share conditional offer, which it upped later in the day to $8.50.

The Access Industries offer was more of a sure bet, but it reportedly also came with a gun to the head of the WMG Board, giving it two days to accept the offer or it would expire.

The deal contains termination fees if the merger fails to go through. Depending on the circumstances of the deal's failure, it would either require WMG to pay Access $56 million; or Access to pay WMG either $60 million, or -- if a willful breach of its material representations, warranties, covenants or agreements contributes to the failure -- a total of $140 million.