New York-based investment banker Harris Nesbitt Gerard is shopping independent label Fantasy Records, sources say, and the auction process is heading into the due-diligence phase.

New York-based investment banker Harris Nesbitt Gerard is shopping independent label Fantasy Records, sources say, and the auction process is heading into the due-diligence phase.

The label is known for a strong catalog that includes Creedence Clearwater Revival and many jazz and soul greats. One of the partners, Manny Gerard, a longtime analyst of the music and entertainment industry, is overseeing the sales process.

About 15 companies participated in the first round of bidding; sources suggest they have been whittled down to about five suitors. Among the parties said to be interested in the label are Rykodisc, Concord Jazz and Redux Records, the company Joe Bianco and Anil Narang launched to acquire catalogs. Sources also suggest that Sanctuary Group and a group that includes a former major-label president are interested in Fantasy.

According to sources, the label generated total revenue of $30 million in 2002; about half of that was from the United States, and the other half was from worldwide licensing. In addition, Fantasy's publishing holdings are believed to have generated about $2.5 million in net publisher share (NPS).

While Fantasy's owners, led by label chairman Saul Zaentz, are believed to be asking for $100 million, sources say the offers will likely range from $65 million-$85 million, depending on the company's 2003 fiscal results. Sources suggest that in the United States last year, Fantasy had $14 million in total sales, and $11 million net.

Fantasy Records declined to comment, and neither its investment bank nor its prospective suitors returned calls.

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