Warner Music chief exec Edgar Bronfman only has to be rumored to be talking to EMI shareholders for the British music company’s stock price to rise.
As soon as the U.K. media reported that he’d flown into London to have pow-wows with Fidelity (which owns 7 percent of the company) and Aberdeen Asset Management, EMI’s price edged up from about 235p to a shade more than 252p.
Another Warner bid for EMI, which would be the third this year, looks unlikely as the European Court of First Instance has just overturned the European Commission’s decision to allow Sony and German media giant Bertelsmann to merge their music businesses.
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Those who had the punt that pushed up the share price 7 percent September 27th look to be backing the theory that there could be something in U.S. newspaper reports that Bronfman and Bandier have been talking.
It would be surprising if they hadn’t, as it has long been rumoured that Bandier is only getting out of the company he’s spent nearly two decades building so he can buy it with a pile of private equity money.
He told EMI Group chairman Eric Nicoli that he wanted out more than 18 months ago.
Bandier has made the company something of a cash cow and would have no trouble getting the backing because a publishing house is a smart acquisition, particularly when plucked from under the noses of major music conglomerates that have been frozen out of the game by European competition rules.
Neither would Bandier be bothered by the indies, who have sunk the Sony BMG deal and are now trying to torpedo Universal’s acquisition of Bertelsmann’s music publishing empire.
He’d be splitting a major music company by buying the publisher, and wouldn’t face the problems that Bronfman will if he tries to put two majors together.
It might equally be that Bronfman was just sounding out Bandier about taking a top role with Warner’s publishing business.
Over the last six months, Warner and EMI have tried to get together but have proved to be such a stubborn couple that they can’t agree on which should buy the other.
It’s been an expensive summer stalemate, considering the cost saving of the tie-up is about £100 million a year, but it’s likely it would have gone on longer if the European court (July 13th) hadn’t caused both parties to cool it by throwing out the Sony BMG merger.
– John Gammon