Sony Corp is in the process of offloading it stake that's half of Sony/ATV Music Publishing, which is the world's largest music publisher.
Sony and Michael Jackson's Estate jointly own Sony/ATV Music Publishing. The joint agreement between Sony and Michael Jackson's Estate that allows one partner can buy out the other.
Making use of this clause, Sony is planning to sell half of Sony/ATV Music Publishing. The estimated value of Sony/ATV is at $2billion. However, Sony' offer comes at a time when there's no attractive valuation in the market.
Sony Corp and renowned pop singer Michael Jackson floated joint venture Sony/ATV in 1995. A decade earlier, Michael Jackson bought ATV from Australian businessman Robert Holmes. Beatles singer Paul McCartney was also the bidder for it.
Despite its plans to offload its stake in Sony/ATV, Sony Corp has not set any offer price so far. Wall Street Journal in last December reported that Sony was planning to sell a unit.
Sony/ATV owns huge collections of famous music artists including Taylor Swift, Lady Gaga, Queen and Kanye West. Sony/ATV has rights of the majority of the Beatles' songs.
Sony/ATV has 39 percent stake in EMI Music Publishing is valued at $860mn based on the $2.2bn acquisition in July 2012. In this stake, Sony has 29 percent and 10 percent held by Jackson Estate.
The other owners in EMI are Mubadala Development Company, Jynwel Capital Limited, the Blackstone Group's GSO Capital Partners LP and David Geffen.
For the year ended March 2015, Sony/ATV registered revenues of $559mn (yen70.96bn). Market analysts wonder over why Sony has opted for divesting stake at a time when there's no high valuation.
Earlier, publishing assets were selling at over 13 times of net publishers' share (NPS). Whereas now, the publishing assets trade on 10 times of NPS only
Sony/ATV has 3.97million copyrights and the number rose 10.3 percent year-on-year. This was combined figure of Sony/ATV and EMI Music Publishing. Sony Music Entertainment recorded 8.2 percent growth in revenues to $4.53bn for the year ended March 2015.
Sony/ATV has 1.94mn copyrights and EMI Music Publishing owns 2.03mn. The growth average monthly net catalogue is estimated to be 30,000 songs. The nearest competitor to Sony/ATV is Universal Music Publishing, which owns 3.mn copyrights.
Warner/Chappell is the world's third largest music publisher, which owns copyrights in the range of 1million to 2million songs.
Sony Corporation's subsidiary Sony Music Entertainment has 50 percent stake in Sony/ATV. Sony/ATV-led investor group bought out EMI Music Publishing in 2011 from Citigroup for $2.2billion.
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