EMI 'opens its books'

18-05-2007

EMI 'opens its books'
UK record company EMI has opened its books to a number of potential takeover suitors, according to reports.

EMI's rival Warner Music is among those who have been reviewing the company's financial information, according to industry sources cited by both the Guardian newspaper and the Reuters news agency.

The rumours follow EMI's rejection in March of a £2.1 billion takeover bid made by Warner. The London-based music group, home to a number of top artists including Robbie Williams and Kylie Minogue, had said the offer was too low and that the bid could by stumble over regulatory hurdles.

Analysts say before deciding whether they have a future together EMI and New York-based Warner Music are likely to wait for a European Commission ruling over whether a 2004 merger between Sony and BMG should have been permitted under European Union (EU) rules.

Last year a European court annulled approval for the Sony BMG deal granted by EU regulators after the merger was challenged by the indie sector and independent record labels have been critical of moves towards the consolidation of the music industry.

Industry sources also told Reuters that private equity firms One Equity, Cereberus and Fortress have also examined EMI's books, with analysts saying that a takeover deal with any of the investment groups could be reached quicker than a merger with Warner.

Speculation that EMI, which has issued two profit warnings this year, may put itself up for sale comes after the group revealed on May 4th that it had received "a number of preliminary indications of interest to acquire the company".

"The significant aspect of this is EMI was in a cat and mouse game with all the potential buyers. Now it has initiated a formal process to sell the company," one industry source told the Guardian.



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