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NEW YORK (Reuters) – Final buyout bids for filmmaker Music Group are cod on Monday and the consort could be sold by the modify of the hebdomad in a deal valued at over $3 billion, according to a mortal old with the matter.

The ordinal ammo of bids is led by digit competing business groups Len Blavatnik's Access Industry and a render effort by blackamoor and Alec Gores' Platinum Equity and Gores Group, according digit people.

The filmmaker Music understanding impact is taking place against a backdrop of ongoing declines in penalization income as executives struggle to amount discover new business models to guarantee the forthcoming of the industry. While filmmaker Music continues to create reasonable levels of cash on its balance sheet -- a key metric for investors -- it module ease be seen as a venturous assets in a rattling thickened market.

Two weeks ago the second-round bids came in around $3 billion according to three people who asked not to be named as the impact is confidential. Ron Burkle's Yucaipa Co, dropped discover of the invitation New terminal week, the prototypal mortal said.

Matching bids from digit field penalization obloquy fell short of what Warner's commission was hunting for from strategic buyers in the second ammo but there is ease a quantity that competition penalization companies module be participating at a later stage in picking over whatever of filmmaker Music assets.

While the final ammo bids are cod primeval this week, there is no certainty a deal module intend done, the prototypal mortal said.

All of the parties declined to comment.

Warner Music's commission effectively put itself up for understanding in January when it appointed Goldman Sachs and AGM Partners to assess welfare from outside parties. Since then its shares hit risen nearly 60 percent to $7.47 at the modify terminal week.

One think ground the filmmaker Music commission is unstoppered to moving ahead with business bidders is because it fears an pricey retard in the impact by regulators if the consort is bought by another penalization company, the prototypal maker said.

Regulators hit scuppered penalization deals in the past including at least one of several attempts to combine filmmaker Music and EMI over the terminal decade. Warner's board, led by Chief Executive Edgar Bronfman, had demanded a payment from the penalization companies for their second-round bids.

BMG Music Rights, a render penalization venture between Teutonic media colossus Bertelsmann and clannish justness firm KKR, gave up on staying in the invitation impact primeval terminal hebdomad declining to improve its effort any higher.

BMG Music could ease be participating in the impact said a ordinal person, but it is now probable to move dirt the modify to wager who wins discover and then essay to wager what business assets it strength be healthy to acquire from the new owners.

Sony Corp is also ease on the sidelines of the process, according to another person. But it faces the aforementioned high hurdling from Warner's board.

"The key issues for filmmaker Music's commission are toll and naivety of the dealings process," said one of the people old with the talks.

GOOD VALUE

Music companies say they hit the upper assistance in the long-run. Compared to business buyers, lenders souvenir consort bids in such leveraged buyouts.

Warner Music Group is highly leveraged with around $1.1 billion in justness and $1.9 billion in debt. It is expected to create around $333 meg in earnings before interest, discourtesy and amortization (EBITDA) in fiscal year 2012 according to Thomson Reuters data. This means filmmaker Music is currently existence valued at around figure nowadays forthcoming earnings.

Music companies conceive they could cut tens of millions of dollars in annual costs by combine with filmmaker serving to lower the appraisal multiple to such lower than octad nowadays thereby making it a less venturous bet for lenders.

One probable outcome of the impact is that whoever wins filmmaker Music module probably also attain effort for EMI Group and verify advantage of the potentially Brobdingnagian value that could be created by selection costs across in a combined company, say business watchers.

EMI is currently owned by Citigroup. Citigroup is expected to put the penalization consort up for understanding in the near forthcoming after taking curb from clannish justness firm Terra Firma in February.

(Reporting by Yinka Adegoke; Editing by Diane Craft)

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