Shares in the EMI Group dropped by nearly 8% yesterday after the major said that discussions with a private equity firm, who had expressed an interest in buying the company, "have now ceased". In a brief statement issued to the London Stock Exchange, the EMI board said it had "not received an offer that fully reflects the prospects for and value of the company and which it could recommend to shareholders".
As previously reported, recent speculation that EMI was a takeover target became official at the end of last month when EMI confirmed it had received a "preliminary approach" from a possible unnamed buyer, generally believed to be Permira Advisers. At the time EMI bosses said it was in discussions with the interested party which "might or might not lead to an offer being made for the company".
Reports suggested those talks were moving along well, leading to a rise in the company's share price. But yesterday's announcement means that there is no imminent likelihood of EMI being bought out, although city insiders say the major still remains a definite takeover target, most likely for an investment firm like Permira.