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Heaven knows they're happy now
Rudy Ruitenberg and Aisha Phoenix

 


SANCTUARY, the music rights and management group that started life as management for Iron Maiden and has Morrissey on its roster, agreed Friday to be bought by Universal Music, the world's largest record company, for 66m.

Universal will pay 20 pence a share in cash for Sanctuary, the Vivendi unit said in a statement. That's 13% more than Friday's closing price for London-based Sanctuary.

The deal broadens Universal Music's scope, adding merchandising, artist management and talent businesses, as the company looks for new revenue streams. Sanctuary, whose shares slumped 97% in 2006, ousted co-founder and CEO Andy Taylor last year because of adjustments made in the 2005 accounts. Sanctuary has posted losses the last three years.

"The Sanctuary business will be a good strategic fit for us, " Universal Music chief executive officer Doug Morris said in the statement.

Sanctuary has lost almost three quarters of its market value since September 2004. Sanctuary suffered from delayed album releases and costs related to takeovers and said in April it would be "2008 or later" before the company can return to pro"tability.

"The past few years have proved to be a very difficult time for Sanctuary and a very disappointing one for its shareholders, " chairman Robert Ayling said in the statement. "Growth and profitability will continue to be hampered by the Sanctuary Group's present capital structure and by industry factors. Therefore, we intend to recommend this offer."

Sanctuary said this week that fiscal first-half sales slipped 3.3% to POUNDS! ! ! ! ! ! ! !63.7m ( 94m). Sales at the recorded product division dropped more than Sanctuary forecast as the division struggled with the "adverse" market conditions that are affecting the recorded music industry, Sanctuary said in a separate statement.

The music industry saw album sales fall 17% in the first quarter as rising online piracy and fewer new hits accelerated the industry's decline. Retailers sold 117.1 million albums in the three months ended 1 April, according to researcher Nielsen SoundScan.




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