Warner Music to participate in takeover of Britain-based EMI

Warner Music Group Corp. said it has decided against making an offer to acquire rival music company EMI Group PLC but noted it reserved the right to do so later.

Photo: Warner Music to participate in takeover of Britain-based EMI

New York-based Warner Music said on Tuesday that it reserves the right to make an offer or to participate in a takeover bid for Britain-based EMI by someone other than the private-equity firm Terra Firma Capital Partners.

A spokeswoman for EMI said the company had no comment.

EMI's board recommended in May that its shareholders accept a $4.88 billion (EUR 3.54 billion) takeover offer from Terra Firma.

Since then, Terra Firma has extended a deadline for EMI to accept the offer, most recently on Friday, when it set a deadline for July 19.

Many EMI stockholders have been waiting to see if Warner would come forward with a more lucrative offer.

Maltby Ltd., Terra Firma's takeover vehicle, said last week that it has received acceptances for around 3.82 percent of EMI's issued share capital under its offer.

Warner's chairman and chief executive is Edgar M. Bronfman Jr., an heir to the Seagram liquor fortune.

Warner, home to recording artists including Madonna and Red Hot Chili Peppers, had been considering making another offer to purchase EMI, home to artists such as Coldplay and Joss Stone.

The two music companies have been in on-and-off merger discussions over the past seven years, but repeated talks have been stymied on several occasions by regulatory uncertainty and the inability to agree on a price.

In the latest round, Warner offered $4.2 billion (EUR 3.05 billion) in March, but EMI rejected the bid and accepted the Terra Firma offer, led by financier Guy Hands, two months later.

EMI has said that Terra Firma's offer was the best among a number of proposals it received.

EMI shares were down 1.4 percent at 263.25 pence (EUR 3.90, US$5.37) in early trading Wednesday in London. Shares of Warner rose 31 cents to $13.77 on Tuesday.