German media giant Bertelsmann is making preparations to sell its music company holdings including a 50 percent stake in Sony BMG, the world's second-largest music group, a report said Monday.
The London-based Financial Times cited unnamed people briefed on the plans as saying the company has arranged for investment banks to prepare the disposals.
It said the sale, worth an estimated two billion euros ($2.4 billion), would help Bertelsmann fund a buy-back of all or most of the 25 percent stake held by Groupe Bruxelles Lambert (GBL), its only outside investor. The GBL stake is reportedly worth four to five million euros. The sources said the plans are at an early stage.
As well as the stake in Sony BMG -- the New York-based joint venture of Bertelsmann and Japan's Sony -- the German group is considering selling its wholly-owned BMG Music Publishing business, the FT said.
Together, the music companies reported revenues of 2.1 billion euros last year, down 16.5 percent as CD sales fell, the report said.
Bertelsmann owners oppose public offering
Gunter Thielen, Bertelsmann's chief executive, said last week the company would not decide about any moves until it knew more about the intentions of GBL, which has the right to place its stake in Bertelsmann from May, potentially leading to an initial public offering (IPO). But he did not rule out selling the music companies.
Bertelsmann, which owns European broadcaster RTL and book publisher Random House among other businesses, is privately owned by the Mohn family. The family is reportedly opposed to taking the company to the stock market and is therefore looking for ways to buy back the GBL stake to prevent an IPO.
Sony has the right to take full control of the joint venture, which is second only to Vivendi's Universal Music, but is not expected to invest more in media while it is still fixing its
electronics arm, the FT said.
In Tokyo, Sony spokesman Koji Kurata declined to comment on the report, which he said was "based on speculation of a move by Bertelsmann."