Warner Music's latest courtship of EMI gets cool response from key EMI investor

Warner Music's latest courtship of EMI gets cool response from key EMI investor

	Published : Tue, 20 Feb 2007 15:52 By : Agencies Print this Story

LONDON (AFX) - A key EMI Group shareholder has reacted cautiously to news the troubled UK music company has received another takeover approach from US rival Warner Music.

One top five shareholder in EMI said: 'We are not really surprised to see that Warner Music has stuck its head above the parapet as they have always been keen.

'As far we are concerned, the takeover approach does not really move the dial a huge distance.'

The source told Thomson Investment Management News: 'If it progresses to a more formal offer, we will judge it on the basis of the offer.

'In the meantime, we simply want the company to remain focussed on managing the business going forward and delivering the cost cutting - because these are things that are in their control.'

The source declined to comment on separate reports that a hedge fund holding a small stake in EMI has demanded a valuation of the company's music business with a view to a spin-off.

EMI and Warner Music separately said that Warner had not tabled a firm proposal, and that there was no guarantee it would do so.

EMI has issued two profit warnings since mid-January.

Analysts believe a tie-up between EMI and Warner Music could generate cost savings of around 150 mln stg a year, and the two companies have tried and failed to merge on three separate occasions since the turn of the decade.

News of the latest approach sent EMI soaring during morning trade.

At 2:30 pm, EMI was up 16 at 237-1/2 pence.

Meanwhile Standard Life Investments, a top ten shareholder in EMI, said it has sold part of its holdings in company.

The fund manager declined to comment on the approach by Warner Music, but in an LSE statement said it now holds 12.15 mln shares or a 1.54 pct stake in EMI, having sold about 1.97 mln shares at 2.24 pence each.

raji.menon@thomson.com

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