NEW SANCTUARY BID?

Another bidder has emerged for Sanctuary, with U.K. private equity group Crosby Capital Partners reportedly preparing a possible counter bid to trump Universal's 20p-a-share offer, according to a story in today's Guardian.

The firm, with offices in Hong Kong and London, has apparently enlisted lawyers from SJ Berwin to help launch its offer, though insiders say there is no truth to the report. There is also speculation Crosby could come in after the bidding is closed to top Universal’s offer.

Crosby, which is allegedly also a shareholder in the company, which would preclude if from seeing Sanctuary’s books, is said to be preparing an offer in the 25p range. The price offered by Centenary, a division of Universal, values Sanctuary at £44.5m, while Universal will also take on debts of £59.6m.

UMG insiders say the firm’s European merchandising company, which generates “hundreds of millions of dollars" annually, is the key to any acquisition.

The competition to buy Sanctuary will come as relief to shareholders after the shares have slid from £18 in June 2005 to 6.5p last November.

The company, founded by two Cambridge students more than 30 years ago, has issued a string of profit warnings and last year admitted "fundamental errors" in its accounts.

Warner Music Group has also been watching Sanctuary, with an eye towards entering the bidding.