EMI face takeover bid from US group

Music group EMI could face a takeover move from a United States private equity group if it fails in its bid for the recorded music division of Time Warner, according to reports.

The Blackstone Group may make a £1.5 billion play for London-based EMI if a rival consortium beats it in the battle for the recorded music division of the Warner Music Group, one Sunday newspaper claimed.

Another report said EMI may seek merger talks with the rival consortium, an investor group headed by former Seagram chief executive Edgar Bronfman Junior, in order to net the division.

Senior EMI advisers reportedly believe Bronfman’s consortium would find it difficult to afford the £1.6 billion it is offering.

EMI remained tight-lipped about the claims. A spokesman for the group said: “We’re not going to comment on these reports.”

On Wednesday, EMI said talks about buying Warner’s recorded music division were at “an advanced stage” as it posted broadly flat operating profits in the six months to September 30.

But on Friday, it emerged Time Warner had apparently chosen Mr Bronfman’s consortium as the preferred bidder for the division.

EMI, which reportedly has offered £1 billion for the division, responded by saying it had put forward “a full and fair offer with the interests of our shareholders uppermost in our minds”.

The group’s chairman, Eric Nicoli, said: “When we reach a definitive conclusion, we will make a further announcement.”

Blackstone is considering an early approach to EMI chairman Eric Nicoli after becoming convinced the UK music group has lost out to Bronfman, the Observer reported.

But some analysts believe EMI may still try to see Bronfman off by putting in a higher bid, the report added.

EMI’s recorded music division has artists including Radiohead, Coldplay and Robbie Williams in its portfolio.

Prominent Canadian businessman Mr Bronfman transformed Seagram into one of the world’s largest liquor and entertainment conglomerates, with spirit brands Crown Royal and Chivas Regal and music label Polygram under its wing before selling it to Paris-based Vivendi three years ago.

Earlier this week, EMI said group operating profits in the six months to September 30 rose 0.9% to £79.7 million against £79 million beforehand.

It said the small increase had come against a global recorded music industry decline of more than 10%.