Richard Branson founder of Virgin Records believes the label has been mismanaged by current owner Universal and as such has opened up a dialogue bewtween himself and Universal Music chief executive Lucian Grainge this week.
The Guardian reports that Branson will form a partnership with French entreprener Patrick Zelnik, who launched Virgin Records in France in 1980. Branson may also gather other investors in order to put together a business plan to buy the label.
Even though Virgin appears to have been earmarked for sale by Universal in order to fund their EMI takeover, that's not where the story ends. Universal Music's owner the French comapny Vivendi is locked in negotiations in Brussels due to the Eurpopean Commission not sanctioning the divestments proposed by Universal in order to win approval for the EMI deal. The EC is safeguarding against Universal owning more than 40% of any recorded music market in the European Union and may now extend its delibrations into September. Plenty of time for Branson and associates to put together a deal for which they have already declared as an international interest only. Zelnik has stated "We are only interested if it is [a] global [deal]. We are just starting to get figures together for the business plan."
Given the current circumstances for Universal Music, it will be interesting to see what sort of offer Branson and Zelnik put on the table and what sort of offer will be satisfactory to Universal who have already promised EMI owners Citibank 1.2 billion by mid September regardless of the outcome of regulatory approval from the European Commission.
