In April 1969, The Beatles held 27% of the capital in their publishing company Northern Songs. They wished, however, to take full control of the company, after their former partner and publisher Dick James had opened secret negotiations to sell to television executive Lew Grade.
The Beatles needed to acquire a further 23.1%, or 1.15 million shares, at a value of £2.4 million. They needed to borrow £2 million in cash to finance the purchase, half of which was to come from investment bankers Henry Ansbacher & co.
At the same time they were attempting to buy NEMS Enterprises. Both ventures were stretching the group's finances to the limit, meaning they needed to put their own shares up as collateral to fund the purchases.
Lew Grade's ATV, meanwhile, owned 35% of the Northern Songs shares, and Grade wished to buy the company outright. There was also a consortium of investors that owned 15% of the shares, which both ATV and The Beatles needed to require.
John Lennon and Paul McCartney were divided over what to do. Allen Klein, who represented Lennon, thought the deal to buy the remaining shares could be improved, while John Eastman, on behalf of McCartney, felt it was a dangerous manoeuver. Lennon also discovered that McCartney had secretly been buying extra shares in Northern Songs, meaning the two songwriters no longer had an equal share; Lennon was furious upon discovering the news.
In April 1969 Klein approached EMI and Capitol to try to gain assistance to buy the consortium's shares, but the record companies declined. The Beatles also issued a press statement in which they invited a representative of ATV to join the board if they gained control of Northern Songs.
Lennon, however, derailed negotiations with the consortium. He announced in a board meeting that he wasn't prepared to be "fucked around by men in suits sitting on their fat arses in the city". The men in suits took umbrage and walked away from negotiations with The Beatles.
ATV, however, were barely more successful. Its offer of ATV shares rather than cash didn't impress the consortium's members, and in May the consortium said it was unhappy with both offers and was keeping its options open.
Negotiations continued throughout the summer and into the autumn of 1969. Klein attempted to make a deal with Lew Grade, but Grade grew tired of his delaying tactics and made an approach to Peter Donald, a major shareholder in the consortium. Grade offered 40 shillings (£2) per share for the consortium's 15% holding, which was less than The Beatles' offer.
Donald accepted Grade's proposal, and on this day Grade took control of 54% of Northern Songs. The Beatles had lost the publishing of the songs they had written. The group were resigned to selling their shares to ATV.
In the coming weeks Klein continued to negotiate with Grade. A deal was floated by which The Beatles' shares in Northern Songs would be exchanged for cash and ATV stocks, which would mean the group still had a stake in the songs. Lennon and McCartney would re-sign to Northern Songs, would buy back Maclen (Music) Limited and would get sub-publishing rights in the US.
Although it would have been advantageous to Lennon and McCartney, the deal fell through when John Eastman rejected it as he had played no part in the negotiations. Lennon and McCartney received £3.5 million in ATV loan stock for their Northern Songs shares, and by December 1969 ATV had acquired 92% of the company.
Also on this day...
- 2010: English Heritage plaque to be unveiled at Lennon’s former London home
- 1969: Paul McCartney is interviewed for the BBC’s Scene And Heard
- 1968: Recording: Piggies
- 1967: Filming: Magical Mystery Tour
- 1966: George and Pattie Harrison hold a press conference in India
- 1966: John Lennon films How I Won The War in Spain
- 1964: Day off in Alton, Missouri
- 1962: Live: Cavern Club, Liverpool (evening)
- 1961: Live: Cavern Club, Liverpool (lunchtime)
- 1960: Live: Indra Club, Hamburg
- 1959: Live: Casbah Coffee Club, Liverpool
- 1934: Brian Epstein is born
Want more? Visit the Beatles history section.