EMI expected to reject Permira bid

Shares in EMI rose 2% today following a report that the music group is expected to shun a private-equity bid worth £2.5bn (€3.7bn).

Permira is thought to be preparing a 310p-a-share offer for the company, which boasts a roster including Robbie Williams, Coldplay and the Rolling Stones.

Last week EMI admitted it had received “a preliminary approach” that “may or may not” lead to an offer being made for the company.

The Times reported today that the record firm is thought to want at least 350p a share and would regard Permira’s offer as too low. EMI shares were up 6.5p at 296.5p.

The music company, which is enjoying current chart success from acts such as My Chemical Romance and Scissor Sisters, refused to comment on the report.

It is not the first time private-equity interest has been shown in the EMI. US buy-out giants Kohlberg Kravis Roberts and Goldman Sachs have also been linked with a move for the firm.

EMI shelved plans in the summer to pursue a £1.35bn (€2bn) takeover of US counterpart Warner after a European court judgment cast doubt on whether regulators would allow further consolidation in the music industry.

EMI and Warner Music were long seen as merger partners, a move that could have added Madonna and the Red Hot Chili Peppers from the Warner camp.

The London firm made two offers to acquire Warner over the summer, while its target tabled two counter-proposals to buy EMI. All of the approaches were rejected.

The regulatory picture changed when the European Court of First Instance annulled the previous EU approval of a 2004 tie-up between Sony and BMG, a move that created the second-largest music company in the world behind Universal.

EMI said last month it had offset a fall in profits by highlighting rapid digital growth with a number of big-name releases planned for later in the year.

The music giant saw underlying pre-tax profits for the six months to September 30 slide to £18.6m (€27.6m) from £41m (€60.9m) during the same period last year.

It cheered a 68% rise in turnover at its digital arm to £73.7m (€109.5m) and said a host of big-name record releases in the second half should reverse its fortunes.