Report: UMG Working On Details To Buy EMI

Getting Closer?

On MONDAY (NET NEWS 11/7), THE WALL STREET JOURNAL reported UMG might be back in the bidding war for EMI, after dropping out at one point. THE JOURNAL wrote "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 JOURNAL has updated that report, and now says "UNIVERSAL MUSIC GROUP is in advanced talks to buy EMI GROUP's recorded-music unit from CITIGROUP INC., moving to the head of the pack in an auction it had only recently stepped away from, according to people familiar with the matter. UNIVERSAL's resurgence comes after [Parent company] VIVENDI last month reached an impasse with CITIGROUP over EMI's pension liabilities. Last week, CITIGROUP softened its position on the issue, which appears to have rekindled the talks between the two companies, one of the people said. Meanwhile, WARNER MUSIC, owned by Russian-American billionaire LEN BLAVATNIK, last week stepped back after it failed to reach an agreement with CITIGROUP on price" (NET NEWS 10/31).

Whenever EMI is sold -- if in fact, it is -- the buyer will run into regulatory issues in EUROPE from IMPALA (NET NEWS 11/8). That organization's Exec. Chair HELEN SMITH recently said that "the group will complain to the EUROPEAN COMMISSION about any deal that consolidates the industry into three major recorded music groups and four music publishers. IMPALA 'could not support' market leaders UNIVERSAL or SONY getting bigger in recorded music or publishing, saying, 'I don’t believe any remedies would suffice."

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