EMI Opens Its Books To WMG
May 17, 2007 at 5:45 AM (PT)
EMI has reportedly opened its books to rival WARNER MUSIC, setting the scene for a four-way bid battle. THEBUSINESSONLINE.COM writes WMG will decide, based on what it discovers during due diligence, whether to alter a 260p-a-share bid it made in MARCH. It is pitched against expected bids from CERBERUS, ONE EQUITY and FORTRESS, three private equity suitors who were all given access to the books earlier this month.
WARNER’s initial 320p-a-share approach for EMI was rejected last summer. It returned with a 260p-a-share offer, which was also rejected. A bid at 260p-a-share values EMI at £2.1bn ($4.2bn, e3.1bn) or £3bn including debt. EMI has issued two profit warnings this year and is struggling to adapt to the shift in consumer tastes from CDs to music web downloads.
It remains unclear whether an EMI-WARNER tie-up would receive regulatory clearance. EUROPEAN UNION regulators are reappraising the 2004 deal that created SONY BMG, with a decision due by JULY 2. The private equity firms are understood to be more interested in EMI’s back catalogue, a securitisation would yield up to £700m, according to MERRILL LYNCH, than the record label business.