Independent Label Gets Bid from British Group
Mar. 02, 1990
WEST HOLLYWOOD, Calif. (AP) _ Thorn EMI, which has been expanding its music operations beyond its Capitol Records label, has offered to buy or distribute Geffen Records, the home of Cher, Guns N' Roses, Whitesnake and Aerosmith.
But the company's founder, David Geffen, said through an aide Thursday that his company, one of the last remaining major independent U.S. labels, is not for sale.
Geffen Records has had a close relationship with Time Warner Inc.'s music division, which manufactures and distributes its records in return for a 50 percent share of profits.
Its 10-year deal with Warner expires at the end of the year, but Geffen owner David Geffen said he hopes to reach a decision on the fate of his company well before then.
Geffen previously has denied seeking a buyer for his West Hollywood-based label, which is said to be worth as much as $750 million.
He told the Los Angeles Times he is still talking with Time Warner and that Thorn had ''made me an offer,'' although he added, ''that's hardly a deal.''
A spokeswoman, Bryn Bridenthal, said Thursday Geffen was trying to renegotiate the distribution contract with Time Warner, and said the company had received offers of distribution deals from other labels.
''But the company is not for sale,'' she said.
Sharon Christians, director of corporate affairs for Thorn EMI in London, would not say if an agreement was near but acknowledged that talks had occurred.
Thorn EMI has been expanding its music portfolio recently, responding to consolidation in the music industry and a booming international market for entertainment.
It purchased a 50 percent stake in Chrysalis records last year, and Thorn EMI officials have said they are close to making a deal to buy a 50 percent stake in Hungary's state recording company, Hungaroton, for $15 million.
The conglomerate's pretax profit for the six months ending Sept. 30 was $171 million, up 12 percent from the previous period.