LONDON (The Hollywood Reporter) — Troubled U.K.-based music indie Sanctuary group took down its for sale sign Sept. 26 with a statement to the London Stock Exchange in which it said the company intended to cut costs and rebuild instead.
“Following a review of the discussions to date regarding a possible offer for the company,” the statement said, “[the board] has decided to withdraw from all remaining discussions with third parties who had previously expressed an interest.”
Sanctuary had not commented on those parties, but sources said they included EMI Music Group, Warner Music Group and various private equity and venture capital groups.
Sanctuary said in the statement that the company “intends to make further additional and substantial annualized costs savings that will be implemented by the financial year-end.”
“As I stated last week, I am totally focused on repairing the short-term damage to what is a fundamentally robust business,” executive chairman Andy Taylor said. “We will be restructuring our business and supporting our artists throughout.”
In June, Sanctuary reported a first-half pretax profit that fell sharply to £1.3 million ($2.3 million) from £6.9 million in the same period last year. It warned investors to expect a 40% drop in first-half cash flow, with full-year cash flow that would be “substantially less” than last year’s.
Two more trade warnings followed, including the one the week of Sept. 19 in which Sanctuary said it expected to post a full-year loss due to “a number of operational and trading problems” and “recent negative commentary.”