Ah, this is no fun, I wanted a vicious bidding war. But it's not to be. Well, probably not. Warner Music yesterday confirmed that it will not be bidding for EMI at this time, although it did say it maintained the right to review that decision should a bidder other than current suitor Terra Firma make an offer.
As previously reported, there has been much speculation as to whether Warner Music, who have long held ambitions to merge with rival EMI to create a major record company of similar size to its two other competitors, Universal Music and SonyBMG, would make a counter-bid for the London based record company, against the EMI board approved offer from private equity firm Terra Firma.
The private equity outfit is still struggling to win over EMI's larger institutional shareholders with their 265p per share offer, and have now extended their deadline for securing control of the record company twice. Insiders say many of those shareholders are hanging on for a counterbid to be made, on the basis that any bidding war would force up the asking price.
In a bid to speed things up, the UK's Takeover Panel, an independent authority that administrates the City Of London's merger and acquisition codes, called on other potential EMI bidders to clarify their intentions by Thursday this week. The call was aimed in particular at Warner Music and also former EMI chief Jim Fifield, who has been rumoured for some time to be putting together a consortium of investors to make another rival bid.
Responding to the Takeover Panel's call, Warner Music yesterday said they would not be making a counterbid to Terra Firma's offer, although they added that they reserved the right to change their mind should a party other than Terra Firma, and specifically Jim Fifield, make a bid. It remains to be seen if, given that Warner Music was the most likely counter-bidder, their announcement persuades those EMI shareholders who have so far resisted the private equity offer to now sell.