EC gives OK to EMI-Terra deal

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The European Commission on Thursday approved private-equity group Terra Firma Capital Partners' £2.4 billion ($4.8 billion) takeover bid for EMI Group.

The clearance for the planned buyout comes despite attempts by EMI shareholders to encourage a counterbid from fellow major Warner Music Group for the British-based music giant.

The commission — the European Union's antitrust authority — cleared the deal under its simplified procedures, which apply when there are no obvious competition problems or complaints from rivals during a one-month period.

Terra Firma, headquartered in Guernsey, is still appealing to EMI shareholders to accept its bid of £2.65 ($5.38) per share in cash. The investment company said last week that it had secured just 3.56% of EMI's issued share capital.

The EMI board recommended in May that its shareholders accept the Terra Firma offer because it delivered "cash now, without regulatory uncertainty." However, several are waiting for rival WMG to lodge a possibly higher offer.

WMG and EMI have been in on-and-off merger discussions during the past seven years, but their talks have been hampered over pricing differences and concerns about possible regulatory obstacles.

In 2006, EMI rejected a Warner bid for £3.15 ($6.40) per share, just after an EU court annulled a merger between the recorded-music units of Sony Music and Bertelsmann to create Sony BMG Music Entertainment. The European Commission is still re-examining that deal.
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