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Warner owner still hopes to buy EMI assets as a result of regulatory investigations

By | Published on Thursday 23 February 2012

Warner Music

Warner Music still has ambitions to take ownership of some or all of the EMI record companies, according to Bloomberg. The mini-major is joining with the independent sector, of course, in calling on US and European regulators to block Universal’s planned acquisition of the EMI labels, Universal having outbid Warner owner Access Industries in the race to buy the British music firm last year.

Bloomberg cites three sources as saying that Access, owned by billionaire businessman Len Blavatnik, is watching the regulator investigations into the Universal/EMI deal closely, hopeful the takeover might be blocked outright, or at least Universal may be forced to sell off significant chunks of the EMI catalogue, or even front-line businesses, in order to win regulator approval.

Access, which last year said current EMI owner Citigroup was overpricing its music assets, would then swoop to try to buy any bits of the major back on the market, enabling it to boost its market share.

As previously reported, the New York Post says Universal has pledged to Citigroup to make up the difference if their $1.9 billion acquisition of EMI is blocked and the bank is forced to sell to another party for less money. If true, that would enable the bank to accept Blavatnik’s lesser offer without affecting its bottom line.

Warner, of course, will be dwarfed by its two rivals, Universal and Sony, if their respective bids to buy EMI’s recordings and publishing businesses go ahead, so its opposition to the two deals, and ambitions to nab any bits of EMI left after the regulatory process, aren’t surprising, though it’s interesting to see it confirmed.

Of course if Warner was to buy the EMI record company outright, it too would need regulator approval, but as a combined EMI/Warner (even if Warner had, as originally intended five years ago, bought the entirety of EMI) would still be smaller than Universal even before its EMI purchase, that deal would presumably get the green light much easier.

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