Sanctuary confirms 'offer' talks

Acts like The Strokes may prove attractive to a potential acquirer

Music company Sanctuary has confirmed that it is in talks which could lead to a takeover offer.

Press speculation has suggested the firm is talking to potential partners or investors.

It said preliminary talks "which may or may not lead to an offer or a further business opportunity" had taken place.

Sanctuary's main business is as manager for artists such as Beyonce, while it also acts as publisher and record company for bands such as De La Soul.

UK singer and former Smiths frontman Morrissey is on the books too, as are a number of mature artists such as Dolly Parton, Bonnie Tyler and Lou Reed, while US rock group The Strokes has a licensing deal with the firm.

The company's shares had risen 0.57% to 43.75p by Friday's market close.

Philip Ranger, director of corporate and investor relations, said the company's shares had risen since an article in the Sunday Times suggesting it was in talks.

"We are not surprised the group has attracted consolidation speculation," Numis Securities said in a research note.

"While on a standalone basis our target price is 45p, we believe a premium for control would be required were an acquisition to take place at current levels."

However, Investec Securities said Sanctuary's unique selling proposition was its independence from the majors, which attracted talent to the label.