Both Warner Music Group and Universal Music Group could be interested in making a play for Sanctuary, the troubled music group which manages Elton John and James Blunt. Sanctuary shares went up more than 40 percent last week as it admitted to the market that it had received approaches from potential bidders, though it did not say whom, according to The Guardian newspaper in the U.K.
Sanctuary could be attractive to a larger music company because of its music merchandising arm and its artist management contracts. Universal already counts Elton John among its artists and acquiring Sanctuary would give it his management contract as well. The same is true for Warner Music with James Blunt.
Sanctuary has been struggling for a while and said in April that it would not achieve profitability until at least 2008, and that its recorded product division would miss expectations for this financial year. , Sanctuary posted an annual loss and said it was considering selling parts of the group as a result. "The board is currently considering a number of opportunities that may enable it to realize value from the disposal of parts of the group," the company said at the time.
"At the same time, opportunities for acquisitions or business combinations, which would improve profitability and enhance shareholder value, will be considered.
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