Report: UMG Back In The Hunt For EMI

Citigroup Continues To Try To Sell EMI

There have been plenty of twists and turns with CITIGROUP's attempt to sell EMI, with some industry observers wondering if the BRITISH music company will ever be sold.

Two weeks ago (NET NEWS 10/27), UNIVERSAL MUSIC GROUP dropped out of the auction for EMI, leaving WARNER MUSIC GROUP owner LEN BLAVATNIK as the leading bidder for EMI.

However, things changed last week (NET NEWS 10/31), as ALL ACCESS reported WMG honcho BLAVATNIK walked away from the $3-4 billion auction for EMI. BLAVATNIK's offer of about $1.5 billion for EMI's recorded music division remained below the price at which CITIGROUP was prepared to sell the asset it seized in FEBRUARY from GUY HANDS' TERRA FIRMA private equity group.

Now, THE WALL STREET JOURNAL reports UMG may be back in the bidding war, writing "it's not surprising that CITI would work to restart its mating dance with UNIVERSAL, which according to people familiar with the matter, it has done in recent days, indicating a potential willingness to be more flexible on the pension issue. It’s unclear whether the talks will go anywhere, but people familiar with the matter say UNIVERSAL may make a new offer."

The sale of EMI PUBLISHING seems not to have hit the same snag as the recording division, as negotiations over EMI MUSIC PUBLISHING are reportedly progressing, with an offer of about $2 billion from BMG, the joint venture between BERTELSMANN and KOHLBERG KRAVIS ROBERTS, beating a bid from a SONY-led group which was still working to secure financing from sovereign wealth funds and elsewhere.

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