EMI May Get Cut To Pieces
Various news reports indicate that EMI chief exec Roger Faxon is unlikely to get his wish to keep the company together, suggesting that – whoever the buyer – it could eventually be cut to pieces.
London’s Evening Standard said BMG Rights Management is interested in EMI’s publishing business, while Mail On Sunday claimed American private equity firm TPG Capital is among the bidders and said it would also be happy to dispose of the company “in separate pieces.”
Any of the majors would face huge regulatory issues if they tried to buy EMI lock, stock and barrel.
Vivendi chief exec Jean-Bernard Lévy says his company may still be interested in acquiring “parts of EMI.”
Citigroup, the U.S. bank that seized the company when former owner Terra Firma defaulted on its loans, has earlier expressed a desire to sell off the company in one piece.
Apart from the obvious monopoly issues the majors would face, times are tight and Citi knows its best chance of disposing of what it’s said to regard as “a toxic asset” is to hive it off one bit at a time.
The next round of bidding is likely to open before the end of the month and Apollo Global Management, which owns American Idol owner CKX, has also reportedly thrown its hat in the ring.
The consensus among UK business analysts is that EMI is likely to fetch £2.4 billion ($4 billion), or about three-quarters of the money that Citigroup lent to Guy Hands’ ill-fated private equity buyout in 2007.