End of an era for music icon Chrysalis

Music publisher Chrysalis yesterday revealed it had agreed a takeover deal with Germany's Bertelsmann Media Group to the tune of £107.4 million.

The buyer has teamed up with private equity group Kohlberg Kravis Roberts (KKR) to acquire a back catalogue of songs by the likes of David Bowie, Michael Jackson and Jennifer Lopez.

Chris Wright, founder of Chrysalis, said the deal marks "the end of one era and the start of another" for the firm.

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BMG - whose catalogue includes Coldplay, Britney Spears and Westlife - said the acquisition will enhance its position as a leading music rights publisher and expand its offering music customers worldwide.

The German outfit has been on a major catalogue-buying spree this year, snapping up Cherry Lane Music Publishing, Evergreen Copyright Acquisitions and Stage Three Music.

BMG chief executive Hartwig Masuch said: "This is the start of building one of the best music companies in the world.

"We will be in a much better position to convince creative talent in the UK to join us."

Masuch revealed that BMG was also working on a "couple more small acquisitions".

He added: "Whatever becomes available, whatever makes sense and is of quality, we will look at."

Yesterday's announcement comes just weeks after Chrysalis confirmed deal talks following mounting speculation it was searching for a buyer.

Chrysalis, which was founded in 1969, reportedly shelved sale plans three years ago just before the credit crunch, having already sold off its recording and radio businesses.

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At the time, buyers linked to the potential sale included EMI, Sony and Warner Chappell.

BMG's agreed 160p per share offer price comes at a premium of 45.5 per cent to Chrysalis' closing share price on 29 October, the day before the firm revealed it was in talks regarding a bid.

Wright, who is chairman of Chrysalis, said: "Our continued progress - evolving from management, recorded music, television and radio to focus on music publishing - has been clearly recognised by BMG.

"As we embark together on the next chapter of the Chrysalis story, I am proud of both our track record and our future prospects in an industry in which we have both innovated and pioneered."

Wright added: "BMG have fantastic resources behind them with Bertelsmann and KKR. I can see, just from the resources they were able to throw at this transaction, how far off the pace we are. It was clearly going to happen at some point."