WMG Reportedly Taking Another Run At EMI
March 12, 2007 at 5:46 AM (PT)
BRITIAN's OBSERVER-GUARDIAN is reporting that WARNER MUSIC CEO EDGAR BRONFMAN JR. is ready to meet EMI Chairman JOHN GILDERSLEEVE to thrash out a fresh merger deal after an initial bid of 260p a share was turned down by the UK company's board two weeks ago. WALL STREET sources say that WARNER's boss is ready to sweeten the terms of his offer, but that "he has to get at least a wink" that a deal is a possible for talks to get under way with GILDERSLEEVE and Chief Executive ERIC NICOLI.
An industry executive in LONDON said, "This is a marriage that is going to happen at some point; they have talked so often in the past." Some EMI shareholders are believed to be unhappy that it has failed to leave the door open to negotiations with WARNER, which in JUNE made a higher bid, worth 320p a share. In DECEMBER, another offer for EMI materialised, this time from private equity group PERMIRA, pitched at 310p a share, but this was also rejected.
EMI turned down WARNER's latest offer on the grounds that it was too low and entailed excessive regulatory risk. A merger between SONY and BMG is being investigated by the EUROPEAN COMMISSION. If that gets the green light, an EMI/WARNER link is more likely.