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Terra Firma wins EMI
• private equity firm buys EMI; tipped to sell recording arm to Warner
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By
Bloomberg feed, Press feed
Wednesday,
1 August, 2007
Terra Firma Capital Partners Ltd.'s 2.4 billion-pound ($4.9 billion) offer for EMI Group Plc was accepted by 90.3 percent of EMI shareholders, ensuring the firm can get financing to buy the record label of the Beatles.
Terra Firma, the London-based buyout firm run by financier Guy Hands, received "valid acceptances'' of the offer from the holders of 732.16 million EMI shares. The firm needed 90 percent support to secure financing from Citigroup Inc.
Hands prevailed after more than two months in which EMI investors held out for higher bids and credit-market turmoil threatened to derail financing. Warner Music Group Corp. and former EMI executive Jim Fifield, after considering making offers, decided last month not to bid.
Shares of EMI rose as much as 14 pence, or 5.5 percent, to 268 pence in London today and traded at 264.5 pence as of 2:09 p.m. Before today, the stock had fallen 4.2 percent this year, compared with a 7 percent gain of the U.K.'s FTSE All- Share Media Index.
EMI, whose artists include Norah Jones, Robbie Williams and Radiohead, had recommended investors accept Terra Firma's 265- pence-a-share cash bid.
The acquisition marks an end to seven years of attempts by EMI and Warner Music to buy each other. Warner Music, whose artists include Madonna, is looking for additional revenue as illegal file-swapping of digital recordings reduces sales of compact discs. Industrywide, U.S. album sales fell 15 percent in the first half of 2007 from the same period last year.
Warner Chairman Edgar Bronfman Jr. may still get his wish to acquire EMI's recorded music unit, according to Laura Martin, an analyst at Soleil Securities in Pasadena, California. She said in a report last month that Terra Firma may sell EMI's recorded-music business to Warner. That would leave Terra Firma with the music-publishing business of EMI.
Universal Music Group, a unit of Vivendi SA, became the largest music company by revenue when it merged with PolyGram NV in 1998. Sony BMG became No. 2 through the 2004 merger of music businesses owned by Sony Corp. and Bertelsmann AG.
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