When Sony and Bertelsmann agreed to merge their music arms, it was thought that a new wave of mergers was about to begin. The music industry is dominated by the big four: Sony BMG, Warner Music, Universal Music and EMI, and the most obvious candidates for a merger are EMI and Warner, or so it appeared, with EMI making one offer after another, and amidst all the talk of EMI buying Warner, the US company then went along and made a bid for EMI.
But then it all changed. The European Court of First Instance sent everything back to the drawing board, when it rejected an earlier decision to allow the merger of Sony and Bertelsmann, saying regulators needed more time and information to examine the merger.
That rather left the EMI and Warner plans out in the cold, and since then, while the regulators deliberate, merger seem to be off the agenda.
But does that mean EMI will be left to carry on as it is? Not on your nelly does it mean that. This is the era of private equity, and yesterday rumour, counter rumour and finally a confirmation of sorts, pushed EMI shares up ten percent as the City decided the music label was going to private equity.
The FT first revealed the story first, with the Times and Independent not far behind.
It is thought private equity firms Permira and Apollo have both made an approach, but all EMI would do is confirm interest had been expressed and that it “may, or may not, lead to an offer being made for the company.”
The EMI music label holds such illustrious names as Robbie Williams, Coldplay, Gorillaz and the Rolling Stones and after yesterday’s share price rises it has a market valuation of £2.29 billion.
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