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Warner Music Rejects EMI Bid
May 3, 2006 at 6:50 AM (PT)
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WARNER MUSIC GROUP has rejected a $4.2 billion takeover bid by the EMI GROUP, according to REUTERS. The move is the latest setback in the long-running attempt to combine the two companies. EMI revealed its $28.50 per share bid today (5/3), and said that it still believes that buying WMG would be a good deal for both companies' shareholders.
WMG said that its board "carefully evaluated the proposal and determined that it was not in the best interests of its shareholders," according to the report. The $28.50 a share offer represents an 18 percent premium to the value of WMG's shares prior to an APRIL 23rd newspaper report that the companies were preparing for preliminary talks.
"This is disappointing as we believe the logic for combining the two businesses is compelling," NUMIS analyst LORNA TILBIAN told REUTERS. "Today's announcement highlights the difficulties in putting together such a deal, particularly with respect to valuation and management."
EDGAR BRONFMAN, JR. and a group of private equity firms bought WMG from TIME WARNER two years ago for $2.6 billion. The long-rumored merger with EMI would allow the combined company to more effectively compete against larger rivals UNIVERSAL MUSIC and SONYBMG, according to analysts.

