Warner Music Plans To Bid $510 Million For EMI
By: Bruce Houghton
Terra Firma's Guy Hands and EMI CEO Roger Faxon claim they have no intention of selling EMI. But its doubtful that their largest lender...
... Citigroup agrees, and since loosing his lawsuit woth the bank, Hands may have no choice. Eager, as he has in the past to take advantage of EMI's struggles is Edgar Bronfman Jr's Warner Music Group, who The Guardian reports is once again readying a $750 million fire sale price bid for EMI's recorded music division that should be delivered to Terra Firma within weeks.
Citigroup reportedly supports selling EMI's recorded music as part of a debt reduction plan. Another possible scenario could see Citigroup offering to cancel debt in return for taking control of EMI's profitable music publishing division. That would also clear the way for a merger of EMI and WMG.
EMI appears likely to become in breach of its loan covenants when the next review happens in March. If that is true, the only way that Hands can avoid Citi forcing a sale or takeover appears to be if already beleaguered Terra Firma investors agree to pump still more cash into EMI.
About the Author:
Bruce Houghton is a 25 year music industry veteran who owns booking agency Skyline Music and the tour marketing company Skyline Innovations.
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