Last Call For EMI

Citigroup has reportedly whittled down the bidders for EMI to a select group and asked them to come back with their best offers by Oct. 5.

The whole deal should be done and dusted by the end of the year, according to the Los Angeles Times, which cited “executives familiar with the auction.”

Citi’s had control of EMI since February, when former owner Terra Firma allegedly defaulted on the loans it needed to complete its £4.2 billion purchase of the English music company in 2007.

At the beginning of September, Terra Firma chief Guy Hands began a High Court battle in London to establish Citi’s reasons for seizing control, given that his private equity firm’s loan covenant tests weren’t due for another month.

The Times also said Citi was prepared to entertain bids from companies that wanted to buy all of EMI, such as Len Blavatnik’s Access Industries, as well as bidders looking to pick up only part of it.

Apart from Blavatnick, who has just bought Warner Music Group, the other names in the frame are widely reported to include Sony Corp., BMG Rights Management, Universal Music Group, and a couple of U.S.-based private equity firms.

EMI chief exec Roger Faxon has expressed a wish that the company be sold as one going concern, but the consensus among UK business analysts is that it will get sold in whatever way raises the most cash for Citi.

EMI’s publishing unit is smaller than its recorded music business but it’s still the most profitable.

Although indies association IMPALA says it’s unlikely the various regulatory authorities would allow EMI to be sold to another major label, the Times is among the papers suggesting – given the economic climate – that may not be the issue it would have been three or four years ago.

Such a deal would reduce the number of major record labels from four to three, down from six in the late 1990s.