Bertelsmann Involved In EMI Talks
March 17, 2010 at 4:27 AM (PT)
There's a familiar name now being mentioned as part of a group looking to break up EMI's music and publishing divisions before buying them. YESTERDAY (NET NEWS 3/16), THE TIMES OF LONDON reported WMG and GERMAN private equity group KKR were discussing acquiring parts of EMI. It turns out KKR (KOHLBERG KRAVIS ROBERTS & CO) created a joint venture in JULY 2009 (NET NEWS 7/8/2009) to own and manage publishing rights with BERTELSMANN AG, the former part-owner of RCA RECORDS.
The venture, which holds EUROPEAN back catalogs of more than 200 artists from SONY BMG, will received about 50 million Euros in funding from KKR then, and would get about 200 million euros over the next five years to finance possible acquisitions,
EMI, writes REUTERS, "is owned by LONDON-based private equity firm TERRA FIRMA, which has warned of a 'likely significant' shortfall when the covenants on its 2.6 billion-pound ($3.88 billion) debt are tested at the end of this month. EMI MUSIC, which is seeking new funds to avoid breaching debt covenants, said Chief Executive ELIO LEONI-SCETI would step down on MARCH 31st, just a month after he was expected to come up with a new business plan. Non-executive Chairman and former ITV boss CHARLES ALLEN is to become executive chairman after LEONI-SCETI leaves."
TERRA FIRMA is also embroiled in an increasingly bitter legal dispute with CITIGROUP relating to the advice and financing it gave to enable the private equity group's acquisition of EMI in 2007.