Embattled U.K. independent music company Sanctuary Group is believed to be closing down the iconic Sanctuary Town House recording studios, formerly one of its prized assets, because it has failed to find a buyer.
Sanctuary was unavailable for comment about the London-based studios’ fate. But despite searching for a buyer for more than six months, no one has come forward.
And unless one is found by the end of its fiscal year on Sept. 30, employees have been informed that Town House will be shut down for good. Sanctuary is currently undergoing job redundancy consultation period with Town House staff.
This latest news about Town House, which was acquired from EMI Music in 2002 and has hosted major recording acts ranging from Elton John to Coldplay, comes shortly after Sanctuary reported a 3% drop in revenue to £65.6 million ($122 million) for the six months to March 31.
Gross profit also slumped to £19.8 million ($36.9 million) from £22.3 million ($41.6 million) during the same period, while operating losses more than doubled to £18.7 million ($34.8 million) to £7.4 million ($13.8 million).
Yet, Sanctuary itself has rebuffed a recent takeover bid from its smaller rival MAMA Group (Billboard.biz July 24, 2006), then later agreed to meet up with MAMA last week to discuss the offer.
“Following this meeting,” Sanctuary said in a statement, “the directors of Sanctuary have concluded that the approach from MAMA is without merit and is not in the interests of Sanctuary shareholders. Sanctuary has therefore rejected the MAMA approach and terminated discussions.”
MAMA maintains that its offer is in the best interest of Sanctuary’s shareholders “and reserves the right to proceed with an offer without the recommendation of the Sanctuary board (of directors).”