Thomas H. Lee Co-Pres. On WMG/EMI And CC Deals
April 11, 2007 at 5:45 AM (PT)
REUTERS reports declining profits and growth at EMI GROUP are becoming "increasingly problematic," according to a large shareholder of WARNER MUSIC GROUP, which is pursuing a bid to buy EMI.
"We want to be very realistic about what we would be buying and what we could do with the company, (as) the base level of profitability and the growth becomes increasingly problematic," said THOMAS H. LEE PARTNERS Co-President SCOTT SPERLING.
Britain's EMI rejected a 2.1-billion-pound, or 260 pence per share cash takeover proposal from WMG last month, saying the price was inadequate and not in the best interests of its shareholders. THOMAS H. LEE PARTNERS owns 37.2% of WARNER MUSIC, according to REUTERS data. WARNER and EMI have made several attempts to strike a deal for at least six years.
Clearly that's not anywhere near what you'd want to pay today.
Last year WARNER offered 320p a share for EMI.
"Clearly that's not anywhere near what you'd want to pay today," SPERLING said. EMI issued its second profit warning in as many months in FEBRUARY.
Sperling On CC Deal: Too Close To Call
SPERLING also indicated that his firm and BAIN CAPITAL may raise their bid for CLEAR CHANNEL, but added that he was prepared for the deal to fall through and that the deal is "constrained by the realities of the numbers" of the radio industry.
He said that the shareholder vote on that deal is too close to call, and he believes a majority of CC shareholders support the deal but noted the difficulty of reaching the required two-thirds majority. SPERLING said that he and other supporters of the CC deal doubt the stock price will rise if the merger fails.