MOHNS & WHISPERS

In case you’re finding all this reportage about Bertelsmann possibly selling off its music assets overly complex or abstract, just think of the whole thing as a prime-time soap—let’s call it Gutersloh—about the lives and loves of the filthy-rich Mohn family.

In this week’s episode, the family, which has owned Bertelsmann for 170 years, is all freaked out about a rival family that has swooped in and grabbed a quarter of its prized possession and is threatening to take it public. The Mohns have always placed a great value on privacy and are determined to stop this rival from going through with its plans; unfortunately, it will take more money than the Mohns have on hand to get that quarter back, and the family loathes debt. That means they have to sell something in order to raise the needed funds, and there are certain things they would never part with, but the Mohns have always been somewhat ambivalent about music—apart from polkas, of course. So this episode has a cliffhanger ending. Hope that helps.

Bertie CEO Gunter Thielen said last week that no decision would be made until its board meetings in May about how to deal with Groupe Bruxelles Lambert’s announced plans to list its 25.1% stake in the privately held media giant. But German studies majors believe the Mohns would likely be willing to part with their 50% of Sony BMG and/or their wholly owned BMG Music Publishing, which are reportedly worth $3.5-$4 billion altogether, in order to raise the nearly $6 billion GBL's quarter of Bertie is said to be worth.

But is there any entity out there that would conceivably be interested in buying half of a slightly used, slightly bruised music group? It stands to reason that Sony would seriously look at the acquisition for strategic reasons, but is there another prospective buyer out there?

In the L.A. Times this morning, Charles Duhigg theorizes that buying BMG would be tantalizing to a cartel of private investors such as the one organized by Edgar Bronfman Jr. and Thomas Lee Partners to buy Warner Music Group, on which they “made a killing,” as Duhigg puts it. Sony has first dibs on buying Bertie’s 50% according to the terms of the joint venture agreement. “But other potential scenarios include both companies exiting the declining music business by selling to private investors,” the reporter offers.

In a "BreakingViews" commentary today, The Wall Street Journal points out that "There is room for further consolidation" in the music biz, and that "EMI, the perennial wallflower, would probably be keen" to scoop up BMG, especially considering that the British company is finding it difficult to acquire WMG from Bronfman and company.

Like we said, this is a cliffhanger. So stay tuned.