Bertelsmann values its half of Sony BMG at $1.5 billion

Germany-based Bertelsmann has valued its half of Sony BMG Music Entertainment between $1.2 and $1.5 billion, according to a report by Billboard published Thursday. The company reportedly wants to pull out of the joint venture with Sony Corporation (NYSE: SNE), and the noted price would lower if Sony offered to buy some services from Bertelsmann. Apparently the separation was expected to take place this summer, but neither party has reached a satisfactory agreement on the price of the aforementioned half.

The venture between Sony and Bertelsmann started in 2004 and is set to expire in August 2009, but rumors have emerged from within Bertelsmann that a new deal will take place before the expiration date, according to Billboard. Despite these rumors, Bertelsmann CEO Hartmut Ostrowski revealed in January that there were three options at that time: Bertelsmann would take over 100% ownership, sell the company's 50% to Sony, or continue the venture. More frightening is the note by Billboard that Bertelsmann's CFO Thomas Rabe has "reportedly met with at least two private equity companies to discuss the possible sale of its share" in the months since Ostrowski revealed the options.

Sale to a private equity firm would mirror a similar sale that occurred last year with British-based EMI Group. The label responsible for groups like The Beatles and Coldplay sold out to private equity firm Terra Firma, which resulted in mass layoffs and a new management plan that has not benefited the label or its artists. Billboard also notes that industry sources expect much of the European management and control for Sony BMG to shift to the U.S. anyway. If that is the case, it would leave two of the four major record labels based in the United States. The other label is Warner Music Group (NYSE: WMG).