EMI – Sold!

The EMI Group has agreed to an offer by private equity firm Terra Firma for £3.2billion, subject to approval by the firm's shareholders. The deal valued shares at £2.65, while EMI had been asking for £3.00. The EMI board of directors intend to recommend unanimously that shareholders should accept the offer. Terra Firma is run by Guy Hands and is a leading European financier. It owns several companies including Odeon and UCI cinemas, and recently failed to acquire high-street chemist chain Boots.

Three US private equity firms - Cerberus, Fortress and One Equity - also recently expressed an interest in bidding for it. According to the New York Post, One Equity and Cerberus wanted to keep EMI intact. Fortress, however, intended to sell off the music publishing assets to strategic buyers before “flipping” the recorded music business to Warner Music.

What Terra Firma intend to do with the company is unknown. Will they have the patience for the record company to turn reverse their decline? Perhaps they have some radical ideas of their own. Or, as any astute music man will admit, they know the real money is in publishing and sell the record company to Warners.

Of course, the other private equity firms or Warners could counter-offer.

Financial Times story