BMG cues a solo

But who will take Teutons' music stake?

Only a few months ago, Bertelsmann was perceived as a bully, demanding a management shakeup at Sony BMG and the removal of Andy Lack from atop the heap.

Now comes an odd second act.

Bertelsmann has indicated it may want out of the music biz altogether, effectively ending its relationship with a company it tried to shape in its own image.

Bertelsmann confirmed last week that Belgian holding company GBL soon could float its 25% stake in the closely held company. On Monday, reports indicated Bertelsmann may try to head off the offering by selling music holdings to finance its own purchase of the shares.

But as reports of Bertelsmann’s possible sale of its half of Sony BMG made the rounds Monday, speculation flew in the music biz over how plausible such a move would be.

And, of course, who would buy it?

Bertelsmann partner Sony is not likely to pony up, since it probably won’t look to increase investment while its electronic biz is being restructured. (However, an outright purchase could restore Lack to the leadership post.)

There are a limited number of outside buyers willing to plunk down a lot of cash for a company that’s hardly run smoothly since being jerry-built in 2004.

What’s more, with the music biz continuing to struggle with lagging CD sales, many on Wall Street don’t consider this a seller’s market for a big music company.

One possibility for Bertelsmann would be to sell off only the BMG Music Publishing Library to private equity groups; those groups have recently come to see entertainment libraries as good investments.

If Bertelsmann did sell its music holdings, the two units likely would net $2 billion-$3 billion, but GBL’s stake in Bertelsmann is valued around $6 billion.

Bertelsmann has earmarked only about $1 billion for acquisitions this year, far less than the GBL shares would cost.

A sale could bring in a relatively hefty fee; Par recently drew a pricey $900 million for its small library of DreamWorks titles, and the BMG library could be a similarly good investment given the booming ringtone market.

A potential IPO could provide an out for BMG from its partnership with Sony, which took another turn for the fraught when Bertelsmann forced a leadership shakeup at Sony BMG, installing BMG’s former chief exec, Rolf Schmidt-Holtz, to assume topper duties from Lack.

Sony BMG, whose artist roster includes Bruce Springsteen, Santana and Alicia Keys, is the world’s second-largest music company behind Vivendi’s Universal Music.

Bertelsmann, owner of European broadcaster RTL and book publisher Random House, among other businesses, is 75% owned by the Mohn family.

Last week, CEO Gunther Thielen said Bertelsmann would not make a decision on whether to try to purchase GBL’s stake until the Belgian firm formally announced an IPO.

(Ed Meza in Berlin contributed to this report.)