EMI deal divestments: The bidding begins
By CMU Editorial | Published on Monday 24 September 2012
Universal has already been sounding out possible bidders for the labels and catalogues it has agreed to sell as part of its deal with European regulators, and those talks are expected to be stepped up in the coming weeks.
Warner Music, of course, was for many years considered the obvious buyer for the EMI record company, and it bid against Universal to buy it from Citigroup last year. Rumour has it Warner is interested in bidding for the EMI assets now on the block, though as one of the most vocal opponents to Universal’s deal throughout the regulatory process, it won’t find an especially warm welcome at Universal Towers.
Of course, Universal couldn’t afford to turn down its grumpy rival if it bid highest, though given that Warner Music bosses have already gone on record as saying they believe Universal overpaid Citigroup for EMI, it seems unlikely they’ll be making a high bid now.
BMG still seems the most likely bidder for the majority of the EMI assets – it’s already expressed an interest in expanding the master recordings side of its business by acquiring EMI rights, it has the funds available to bid high, and hasn’t gone out of its way to piss off the powers that be at Universal.
Smaller bids for certain EMI units are also likely – Mute’s Daniel Miller will no doubt try to acquire back those Mute copyrights still owned by EMI from the days of his joint venture with the major. And City AM is already reporting interest amongst some private equity types, though it is thought the European Commission will expect Universal to only sell to those with music business credentials, though that wouldn’t stop equity groups partnering with existing music industry players.
Those EMI labels now on the block will, in the short-term, be separated from those divisions that will become part of Universal.
In a memo to staff on Friday, current EMI chief Roger Faxon, as well as confirming that he and CFO Ruth Prior will leave when the takeover deal is fully completed on Friday, said that those people in EMI units for sale will in the interim report into a ‘Hold Separate Manager’, tbc, who in turn will report into a Trustee whose job is to ensure the terms of Universal’s commitment to the European Commission are met.