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Could EMI go for £2.5 billion?

By | Published on Thursday 4 August 2011


EMI could go for up to £2.5 billion, according to reports. If it did, its current owners Citigroup would recoup about 75% of the money it lent to Guy Hands to fund his disastrous little play in the music space back in 2007.

As previously reported, Citigroup started taking serious bids for the London-based music major last month, hoping it too would enjoy higher than expected interest from possible bidders, as Warner Music did when it was put up for sale at the start of the year. Many of the entertainment groups and equity firms that bid for Warner are expected to also make a bid for EMI, including Access Industries, which won the battle to acquire the Warner Music business.

According to the Financial Times, between four and six groups have put in offers to buy EMI outright, while additional bidders have expressed an interest in buying either the firm’s recordings business or its publishing catalogue. The latter is particularly sought after.

Although Citigroup has previously said it would prefer to sell EMI as a going concern, something current boss Roger Faxon obviously wants to happen, some experts reckon Citigroup could make more money from a split sale. BMG getting publishing and Warner/Access the recordings is still being mooted as a possible outcome, though BMG in particular could be outbid.

While a £2.5 billion deal does seem very ambitious, insiders have told the FT that EMI is likely to fetch more than Warner, and that Citigroup is increasingly optimistic about the amount of cash the deal could generate.