The race for Warner Music Group is now down to the three most credible bids but the board would consider more bidders, according to a person with knowledge of the discussions. These three companies were identified by a Bloomberg report as Yucaipa Companies, Access Industries and Platinum Equity. A decision could come from Warner within two to three weeks, this source says.

One common thread between the three leading bidders is they are not major music companies. Sony Music and BMG Rights have put in bids for part or all of the company. In addition, it was reported that Live Nation had entered a bid for Warner’s recorded music division.

All other things being equal, a major music company that already has a large recorded music or publishing division would stand a good chance of placing the high bid for Warner. A company that could reduce cost redundancies could extract greater value than a company unable to eliminate items such as staff, rent and I.T. systems. Just as an example, the reduction of $20 million per year of expenses would add another $200 million to the value of the company when using a 10% discount rate ($20 million divided by the discount rate gives you the lifetime value of the cost reductions).

But all things are not equal. A major music company is likely to face anti-trust scrutiny from regulators. Warner’s board of directors knows a bid by Sony Music, Universal Music or KKR would involve not only a lengthy review process but uncertainty. Such a bid would probably require the bidder to sell off some assets as a condition for approval, and expediency may be traded for obtaining the best price. So if the goal is to sell the company quickly and without uncertainty, avoiding a drawn-out approval process would be wise.

If Warner does sell to either Yucaipa, Access or the Gores, one of the other majors could still get a piece of the company through a side deal with the winning bidder. By allowing a Sony, Universal, KKR or EMI to deal with the winning bidder would allow a Warner division to end up in a competitor’s hands without putting Warner’s current shareholders though antitrust issues.