Reports Of EMI Borrowing; Takeover Bids
February 19, 2007 at 5:40 AM (PT)
THE LONDON TIMES reports EMI MUSIC GROUP is examining a radical plan to borrow £1 billion against its publishing business, which manages the rights to more than 1 million songs. Chairman JOHN GILDERSLEEVE and CEO ERIC NICOLI are urgently looking at ways to "reengineer the balance sheet."
The plan, which is under discussion by the board, is to borrow £1 billion secured against publishing revenues. The proceeds would be used to repay more expensive debt and potentially save £20 million a year.
An EMI spokeswoman said, "Of course we regularly review our financing options, but no new decisions have been made at this time."
The Speculation Continues
Meanwhile, UK's THE INDEPENDENT reports rumours that EMI is set to fall to a takeover bid, with private-equity suitors and its rival, WARNER MUSIC, waiting in the wings.
A former head of EMI's recorded music division, "LUCKY" JIM FIFIELD, and MARTIN BANDIER, outgoing chairman of the company's music publishing arm, are among the names being touted as potential leaders of a private-equity bid.
FIFIELD got the nickname "LUCKY" when he was forced out of EMI in 1998, netting a record £12 million pay-off after having been passed over for the top job at the group. He explored making a bid for EMI, backed by private equity, in 2003.
BANDIER turned EMI's music publishing division into the most powerful in the industry, squeezing money from the company's back catalogue of music by licensing songs for films, musicals and commercials. Since announcing his early departure from the company last year -- he leaves EMI in APRIL -- there has been speculation that he could team up with private equity to bid for music publishing assets.