EMI rejects duet with WMG

Board: Buyout offer 'inadequate'

EMI Group has rejected Warner Music Group's latest merger flirtation.

In a statement Friday to the London Stock Exchange, EMI said its executive board had discussed WMG's 260 pence-per-share offer and decided that it was "inadequate." The offer on the table valued EMI at about £2.1 billion ($4.1 billion).

EMI rose 4.5% to 246.25 pence before close of trading Friday.

At a meeting Friday in London, EMI's board concluded that it was "not in the best interests of EMI shareholders to entertain a preconditional offer which would entail prolonged regulatory uncertainty and unacceptable operational risk at a critical time for the company."

EMI saw its stock crash by more than 10% on Feb. 14, when it issued a profit warning. The stark announcement came just hours ahead of the annual Brit Awards, at which EMI, the only U.K.-based major, walked away with no trophies.

EMI and WMG have been in and out of merger dalliances since 2000. Last year, the company issued a string of tit-for-tat buyout offers, which ultimately dissolved when the European Court of First Instance annulled the European Commission's decision to clear the Sony BMG merger.

WMG's latest approach, announced Feb. 20, sparked in-fighting among the U.K. independent music sector when Impala, the European independent music firm's trade association, agreed to back the proposal. The indie labels Ministry of Sound and Gut subsequently resigned from the membership of the U.K.'s Association of Independent Music, a member of Impala, in opposition to that agreement.

Lars Brandle is global news editor at Billboard.