Business News EMI Sale Timeline Labels & Publishers Top Stories

Citigroup to step up EMI sale efforts, and why BMG might like it if new Warner owner was successful

By | Published on Friday 10 June 2011


So, it’s thought that Citigroup is close to having the papers ready to send to potential bidders for the EMI Group. According to The Wrap, the US bank’s efforts to sell on the music major, which it ended up owning after private equity twonks Terra Firma failed to keep up with the terms of the multi-billion pound loan they’d taken out to acquire the company, will be stepped up this month.

Potential bidders will be given an outline of the business, including financial figures since Citigroup took over at the start of February. The bank won’t take less than $2.5 billion for the music company, and a bidding war could take the asking price to considerably more than that. As previously reported, Citigroup has indicated to EMI chief Roger Faxon that it’d prefer to sell the company to one buyer rather than split up EMI’s music publishing business and record labels to enable a sale. The number of bids recently made to buy Warner outright would suggest that that aim is not unrealistic.

That said, the favourite bidder as of now for the whole EMI Group is Len B’s Access Industries, the new owner of Warner Music. That deal would ensure that Faxon’s ambition to not have the EMI business split up came to be, though whether it would provide job security for the Fax man himself is another matter, given EMI would then be merged with Warner Music, and presumably be led by Warner chief and Blavatnik’s good friend Edgar Bronfman Jr.

Of course, any deal that would combine EMI and Warner would be subject to a lot of regulatory scrutiny, and some have postured that the fear of regulatory hurdles might make Citi more likely to sell EMI to one of the other consortiums who bid for Warner, such as that led by the Gores brothers, assuming there was interest on their part to own the British music major.

Though, if the New York Post is to be believed, some are relishing the prospect of an EMI/Warner merger, and the resulting regulatory flim flam. The Post reports that BMG, originally one of the favourites to buy both EMI and/or Warner, but which, in the end, just didn’t have enough cash to compete in the recent Warner bidding war, is hoping thar Access Industries does get EMI, and that there are regulatory conditions put upon that deal by the European Union. Preferably forcing Access to sell Warner’s publishing business, Warner/Chappell, which BMG would quite like to acquire (and indeed in its original bid for Warner, that’s what the company went for).

So, interesting times ahead.