EMI Still Looks Like A Sell

Whatever stories there are about Citigroup looking at various options for EMI, the consensus of opinion among analysts is still that the U.S. bank will sell it.

Many business writers are dismissive of the notion that Citi will plough in even more money to build EMI and its capital value. And they’re certainly not convinced the bank is seriously looking at floating it on a stock exchange.

Apart from what Citi has already lost through its involvement with EMI, there’s also been the cost of kicking out former owner Terra Firma and cutting the company’s debt from $5.43 billion to $1.92 billion.

At the beginning of June the UK papers claimed that Citi considered EMI to be “a soiled asset” and couldn’t wait to dump it, which still looks the most likely course of action.

Russian-born industrialist Len Blavatnik, who just paid $3.3 billion for Warner Music Group, is most papers’ idea of the most likely suitor.
But a successful bid from Blavatnik would doubtless lead to regulatory problems, and Bloomberg is among the business sites saying U.S. billionaire Alec Gores – possibly in cahoots with brother Tom – will be making a serious effort to secure the only remaining major English music company.

A glance down the list of potential suitors indicates the company, which was formed in 1931 by the merger of the Columbia Graphophone Company and the Gramophone Company, is unlikely to return to English ownership.

Apart from Blavatnik and the Gores brothers, others believed to be hovering over EMI include Vivendi’s Universal Music Group, a consortium led by Sony and including U.S. private equity firm Guggenheim, and BMG Rights Management.