Report: Citigroup Getting Lowered Bids For EMI

Credit Crunched?

The sour economy's tight credit markets may prevent CITIGROUP INC. from selling EMI GROUP at a price it desires. BLOOMBERG reports that the corporation may receive lower bids, which may prompt it to break up the conglomerate to sell in pieces, or to postpone the sale.

Reportedly, the players in the EMI auction include WARNER MUSIC GROUP, billionaire RON PERELMAN, billionaire RON BURKLE and a partner, the UNIVERSAL MUSIC GROUP, SONY CORP. and BMG RIGHTS MANAGEMENT. Sources indicate that some bidders have lowered their offers after CITIGROUP disclosed additional liabilities for pensions and leases the company signed for U.K. music stores that have since been closed.

Sources tell BLOOMBERG that the highest bids may total $3 billion to $3.2 billion, while a piecemeal sale could garner $3.75 billion. If CITIGROUP isn't satisfied with any of the bids, it could simply stop the sale and hold onto the properties until debt markets improve.

The interested parties are expected to submit second-round bids for EMI next week; CITIGROUP is expected to pick winning bids in two to three weeks. The bids vary from just the recorded music business or the publishing arm, to the entire company. Some parties may submit two bids -- one for a piece of EMI and another for the whole enchilada.

« see more Net News