More post-Warner share sale nonsense for you. Speculation is now rife as to what Warner's disappointing flotation will mean for a possible EMI Warners merger. The main topic of debate isn't whether or not recent events make a merger more or less likely, rather people are talking about what the investment community's response to the share sale would mean for Warner's negotiating position should merger talks begin.
Wall Street seemed pretty resolute that Warner boss Edgar Bronfman Jnr was drastically overvaluing his company, which might mean that EMI would beat them in valuation stakes, giving the London based record company an advantage in any merger negotiations. Some say EMI would also have a stronger hand because their chairman, Alain Levy, is more respected in investment circles than Bronfman. Plus Levy has former Warner boss Roger Ames on board who, the logic flows, have a good insight into how a merged EMI Warners would operate.
Of course both majors have not formally indicated any interest in entering into merger talks in the short term, though insiders at both say that such a deal, while not a top priority, is still on the agenda. Any merger would need to get the go ahead from European competition officials, who are still facing legal action from pan-European independent music body IMPALA over their decision to let Sony and BMG merge last year.