Citi Won’t Split EMI?

Citigroup would prefer to sell EMI as a whole business, according to The Guardian.

The paper says the Wall Street bank has given assurances to EMI chief exec Roger Faxon that it doesn’t intend to split the recorded music and publishing businesses and sell them individually.

That would likely be music to Faxon’s ears, as he’s often said that splitting the 114-year-old music company would harm its business.
Citigroup was reportedly willing to listen to all offers for the English music firm, including selling the recording business to Warner Music.

Guy Hands and his Terra Firma investment house, which lost EMI to lender Citi, are likely reflecting on what might have been.

Hands reportedly made several unsuccessful efforts to renegotiate the EMI debt, only to see Citigroup write off £2.2 billion of it as soon as it walked through the door.

If the Guardian is right, Faxon will be pleased to have such support for what’s almost mounted to a campaign to hold EMI together.

No sooner had Citi taken over than he emailed staff to say the company’s future depended on “both parts of the business working together.”

“The press will inevitably write that EMI will be broken up and sold in pieces,” he wrote. “So, let me say this as clearly as I can: global rights management is the future, and it takes both parts of the business working together to achieve that future.

“I have no doubt that the best possible way to yield the highest value for EMI is to keep our businesses together in pursuit of our strategy,” he said.

He said that in time even the most skeptical observers would realize it is the best long-term plan for the company.

Even if Citi does sell EMI as a going concern, Faxon still faces the possibility that the new owner may split it up and sell part of the business.

Warner Music, which is looking for funding itself, is said to be looking at least 10 offers for the business.

If it has a real interest in buying all or even a part of EMI, it’ll need to cut a deal before Citi shifts the company elsewhere.