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Universal not considering EMI purchase, Bertelsman might
By CMU Editorial | Published on Wednesday 24 March 2010
A spokesman for the Universal Music Group has told reporters that they are not currently considering buying any of EMI’s assets.
I think that statement also means that they are not in talks with the faltering London-based major regarding licensing their catalogue in the US either.
As previously reported, there has been much speculation that the other majors and various equity types are considering making bids for some or all of EMI as the struggling music firm faces the prospect of its bankers taking control, if and when they default on a £120 million payment due in May relating to their multi-billion dollar loan from Citigroup.
Gossipers say various parties are planning a grab for some or all of EMI, and it’s rumoured some are already talking to both current EMI owners Terra Firma and Citigroup direct about possible deals.
And then, of course, there were reports last weekend that EMI bosses have been touting the idea of another company buying a five year licence to control the major’s recordings catalogue in the US market, a deal which could bring in relatively quick cash and potentially enable the firm’s current owners and management to stay in control.
Either way, Universal said yesterday it was not in talks with Terra Firma about any possible deal. The CFO of German media giant and BMG owners Bertelsmann, Thomas Rabe, did admit, however, that his company would consider bidding for some of the EMI empire – most likely EMI Music Publishing – if it was formally put on the market by either Terra Firma or Citigroup. However, he too said no formal talks were ongoing, telling reporters in Berlin: “I’m not aware that EMI is currently on the market”.
Rumours continue, though, that Bertelsmann’s business partners in the all new BMG Rights Management company, equity types KKR, are actively considering a bid for EMI Music Publishing, possibly as part of a joint bid with Warner Music, who would get EMI’s recordings business.
In sort of related news, Richard Morgan of US business magazine The Deal says he reckons that, according to Terra Firma’s own maths, when you add together the current perceived cash value of the EMI record company and the EMI publishing company you get a figure of £2.2 billion, which is £9.3 billion less than what EMI currently owes Citigroup.
Which is possibly why Terra Firma aren’t going all out for a quick sale of their main music asset just now. Should Citigroup foreclose on the major, they’ll be hoping for a bidding war to up the asking price and reduce their overall losses.
