“That’s All, Folks!” Warner Considers Going Private

Apparently Kid Rock just ain't sellin like he used to these days.

According to a New York Post report last week, Warner Music (yes, the home of such major leaguers as Madonna and the Bullgod himself) is giving serious consideration to swan-divin' it down the proverbial rabbit hole that is Private Ownership to avoid the very same bungling but tenacious hunter that has been whomping many other wascally major label wabbits: falling stock prices, negative sentiment for the industry, and a steady decline of CD sales, all of which are, according to Warner's Understatements Department, "frustrating the company's financial backers."

The news follows a decision by rival EMI Group Plc to accept a private-equity buyout after that company and Warner spent several years flirting (platonically) with the idea of a merger or takeover.

But don't start blogging away about the impending fall of the industry just yet (well... okay, go ahead), because the going-private discussion at Warner Music is, according to Warner's Carefully Worded Vagaries Department, "understood to be in its infancy." Awww, and who doesn't love a cute, little baby?? Uh, but all images of adorable infants aside, Warner Music shares have lost more than 50% of their value in the past year. That's one-half, kids. Ain't nothin' cute about that.

"And what about the whole Digital Music pony?" you ask. Welllllll, let's just say that she won't be keeping the bread in Warner's mouth anytime soon. Last Tuesday, the company posted a wider-than-expected quarterly loss as growth in digital revenue failed to make up for declining CD sales, sending its shares down as much as 10% -- a new low.

In 2004, Time Warner Inc. sold the music company for $2.6 billion to an investor group led by Thomas H. Lee Partners, Edgar Bronfman, Bain Capital and Providence Equity Partners. These brilliant financial clairvoyants decided to take Warner Music public in 2005. Although, to be fair, the three private equity groups still own about 62% of the company anyway. Still, that's some expensive egg to have on your face

On the plus side, the capsizing company's shares actually rose $1.22 to $11.11 on the New York Stock Exchange when the announcement was made, after trading as high as $11.34 earlier in the session.

That's called irony, I think.

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