Blavatnik Cooling On EMI?

Warner Music Group owner Len Blavatnik may be following the private equity firms by cooling his interest in EMI, largely because he thinks Citigroup is taking too long to choose a buyer.

Only days before the Oct. 5 deadline for second-round bids, Financial Times said private equity investors Alec and Tom Gores and the Apollo group were among those backing off the English music company because banks are becoming reluctant to lend in such a turbulent market.

The FT also said Ron Burkle, the U.S. billionaire who bid for Warner Music, is another who will likely hold fire on EMI.
American billionaire and corporate raider Ronald Perelman is believed to be standing his ground, although he too is said to be looking for a bidding partner.

Blavatnick’s waning interest, which was reported by Bloomberg, is apparently because he lost patience over Citi’s apparent indecision over whether to sell EMI as a whole or split it up and sell the parts.

Warner Music and billionaire Ron Perelman are said to be vying for all of the London-based music group, but may bid for the recorded music operations if the company’s parts are sold separately.

It could cause regulatory issues if Warner or one of the other major music companies bought EMI in its entirety. The UK business papers are suggesting BMG Rights Management, Universal Music Group, and Sony ATV, Sony’s publishing joint venture with Michael Jackson’s estate, are looking to get their hands on only part of the company.

Citigroup, which backed Terra Firma’s ill-fated buyout of EMI in 2007, is predicted to get bids ranging from $1.1billion to $1.5 billion for its recorded music business and $2 billion to $2.5 billion for its publishing arm.