EMI walks away from low bid
EmptyLONDON -- Music giant EMI Group on Thursday pulled the plug on a potential sale to an undisclosed alliance of private equity groups.
The music conglomerate issued a statement to the stock exchange here that "discussions with the potential offeror have now ceased," drawing a halt to any potential sale.
The terse market statement Thursday goes on to state: "The EMI Board has not received an offer that fully reflects the prospects for and value of the company and which it could recommend to shareholders."
Speculation is mounting among analysts and industry observers alike as to whether or not EMI is likely to attract a higher, more aggressive bid.
"The bit everyone wants is the publishing arm and EMI knows that. The company is certainly making it very costly to purchase, perhaps too much for most," one industry observer said.
The statement did not reveal the parties mounting the initial bid and EMI spokespersons offered no further comment.
The announcement comes less than two weeks after the music giant was forced to issue a statement to the stock exchange on the back of market speculation and U.K. press reports of a possible £2.5 billion ($4.9 billion) offer from private equity groups for the company (HR 11/28).
EMI said Thursday that the first approach "which might or might not lead to an offer being made for the company" has been halted.
The share price dropped by nearly 10% to £2.73 ($5.36) in early trading Thursday as news of EMI's decision to call a halt to talks. Shares in EMI closed 4p down at £3.00 ($5.90) by the end of play Wednesday night.
The unsolicited bid, which sources attributed to backers led by private equity group Permira, had to be looked at by the EMI board because of its duty to shareholders to look at all such offers.
EMI Group has been under scrutiny as a possible acquisitions target ever since the collapse of its attempted merger with Warner Music Group and its subsequent aborted effort to snap up Bertelsmann's music publishing assets.
"It's business as usual for us," the company spokesperson said.