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| Version 3 | Version 4 |
|---|---|
| EMI receives Warner bid approach | EMI receives Warner bid approach |
| (about 3 hours later) | |
| Music group EMI says it has received an approach from US rival Warner Music that could lead to a takeover bid. | Music group EMI says it has received an approach from US rival Warner Music that could lead to a takeover bid. |
| The move is the latest twist in a battle which has seen both firms try to buy the other in the past seven years. | The move is the latest twist in a battle which has seen both firms try to buy the other in the past seven years. |
| The new approach by Warner Music comes after EMI issued a profit warning last week - its second of the year. | The new approach by Warner Music comes after EMI issued a profit warning last week - its second of the year. |
| Warner said it had approached EMI on 24 January about a deal, adding that it saw "compelling strategic, commercial and financial logic" in a tie-up. | Warner said it had approached EMI on 24 January about a deal, adding that it saw "compelling strategic, commercial and financial logic" in a tie-up. |
| Warner - the world's fourth-largest music group - also said that it had the support of Impala - the trade group for independent music labels that has opposed previous deals in the industry. | Warner - the world's fourth-largest music group - also said that it had the support of Impala - the trade group for independent music labels that has opposed previous deals in the industry. |
| However, EMI - the world's third-largest music group with artists such as Coldplay and Robbie Williams - said it had not received a firm offer and added there was no certainty one would come. | However, EMI - the world's third-largest music group with artists such as Coldplay and Robbie Williams - said it had not received a firm offer and added there was no certainty one would come. |
| EMI's shares closed 18.5 pence, or 8.35%, higher at 238p on the London market on Tuesday. | |
| Competition question | Competition question |
| Previous attempts to merge EMI and Warner Music - the first coming in 2000 with another in 2003 - have come to nothing. | Previous attempts to merge EMI and Warner Music - the first coming in 2000 with another in 2003 - have come to nothing. |
| Last year, both companies made attempts to buy the other, but the moves were scrapped following regulatory fears. | Last year, both companies made attempts to buy the other, but the moves were scrapped following regulatory fears. |
| See EMI's share price | See EMI's share price |
| In June 2006, a European court annulled approval of Sony Music's 2004 merger with Bertelsmann's BMG, and worries over whether authorities would allow an EMI-Warner tie-up caused the firms to end talks. | In June 2006, a European court annulled approval of Sony Music's 2004 merger with Bertelsmann's BMG, and worries over whether authorities would allow an EMI-Warner tie-up caused the firms to end talks. |
| Impala had opposed the Sony-BMG deal, and Warner said the fact that it now had backing from Impala improved the chances of a tie-up with EMI. | Impala had opposed the Sony-BMG deal, and Warner said the fact that it now had backing from Impala improved the chances of a tie-up with EMI. |
| "Warner Music Group (WMG) believes that the agreement reached with Impala and the measures envisaged under it, by setting a new framework for the relationship between a combined WMG and EMI and the independent music sector, improves the prospects for regulatory approval," Warner said. | "Warner Music Group (WMG) believes that the agreement reached with Impala and the measures envisaged under it, by setting a new framework for the relationship between a combined WMG and EMI and the independent music sector, improves the prospects for regulatory approval," Warner said. |
| Sales pressure | Sales pressure |
| Last week, EMI said that profits for the year to March would be "significantly" below expectations. | Last week, EMI said that profits for the year to March would be "significantly" below expectations. |
| It said sales in its recorded music division were expected to be 15% lower than the year before, with sales in its North American division down 20%. | It said sales in its recorded music division were expected to be 15% lower than the year before, with sales in its North American division down 20%. |
| Along with other music companies, EMI has been hit by the trend of consumers downloading individual songs from the internet rather than buying whole albums in physical form. | Along with other music companies, EMI has been hit by the trend of consumers downloading individual songs from the internet rather than buying whole albums in physical form. |
| The label has also seen disappointing sales of major releases such as Robbie Williams' album Rudebox. | The label has also seen disappointing sales of major releases such as Robbie Williams' album Rudebox. |
| At the weekend, the Sunday Times reported that EMI was planning a financial overhaul which would see it borrow £1bn against its publishing business in order to pay off more expensive debt elsewhere in the group. | At the weekend, the Sunday Times reported that EMI was planning a financial overhaul which would see it borrow £1bn against its publishing business in order to pay off more expensive debt elsewhere in the group. |