EMI Group reveals further takeover approach from Warner Music UPDATE

EMI Group reveals further takeover approach from Warner Music UPDATE

	Published : Tue, 20 Feb 2007 08:54 By : Agencies Print this Story

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LONDON (AFX) - Struggling UK music company EMI Group said it has received another takeover approach from US rival Warner Music.

EMI, which has issued two profit warnings since mid January, said there was currently no firm proposal for the board to consider, and that there was no certainty that the latest approach would lead to a formal offer being made.

However, EMI said it would look at any firm bid from Warner 'with particular focus on conditionality, the regulatory and operational risk profile, and on valuation in relation to the Company's stand alone value and the value creation available from a combination'.

EMI and Warner Music have tried and failed to merge on at least three separate occasions since the turn of the decade.

In the most recent episode in the takeover saga, Warner and EMI tabled a number of bids to buy each other last Summer until a surprise European legal ruling cast doubt on a proposed merger winning regulatory approval.

The European Court of First Instance in July overturned the European Commission's approval of the 2004 merger between Sony's and Bertelsmann's music operations, forcing the Union's main anti-trust body to re-examine the controversial deal.

This morning's news comes less than a week after EMI's latest profit warning, which was blamed on poor sales from key artists like Robbie Williams and the Beatles over Christmas and continued weakness in the US market.

That prompted a flurry of newspaper reports suggesting that EMI will restructure its balance sheet by borrowing against its more stable music publishing arm, or even hive off the business from the bigger recorded music unit.

Shares in EMI have lost more than a quarter of their value since the middle of December in the wake of the two profit warnings, sparking renewed speculation of a private-equity bid.

According to market talk, potential private equity buyers would most likely hold on to the publishing arm after selling off the recorded music division to Warner Music.

simon.duke@thomson.com

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