LONDON (CelebrityAccess MediaWire) — Troubled independent music giant Sanctuary Group acknowledged today that it is willing is negotiate a potential hostile takeover bid from smaller rival MAMA Group, originally made on July 14th and described as being “in the best interests of Sanctuary shareholders.”
According to Billboard.biz, MAMA Group informed the media of its bid proposal whether or not the offer “is or will be recommended for acceptance,” as the smaller company believes it is the solution to Sanctuary’s current financial woes.
Sanctuary officially responded with a statement today, saying, “The board confirms that it has received an unsolicited approach from MAMA that may or may not lead to an offer for the company.
“The board is continuing to evaluate the proposal and whilst this evaluation remains at a very preliminary stage, the board has already indicated a willingness, in principle, to meet with MAMA Group following the publication of Sanctuary’s interim results for the six months ended 31 March 2006 by 26 July 2006.”
Based on current share prices, industry observers estimate Sanctuary’s current market capitalization on the London Stock Exchange at $44.3 million.
MAMA Group, a media and marketing company quoted on the much smaller Alternative Investment Market stock exchange, has a reported market capitalization of $29.6 million. Its Channelfly subsidiary includes a chain of U.K. rock music venues, plus interests in music recording, publishing and artist management.
According to Billboard, MAMA’s planned strategy is to take over Sanctuary, dispose of its recorded music assets, and merge its business with Sanctuary’s remaining properties to form a three-pronged enterprise: live music; artists services, management, publishing; and merchandise.
Sanctuary Group is expected to release its interim results report for the six months ended March 30th this week. –by CelebrityAccess Staff Writers