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Warner refuses to give up on EMI despite agreed Terra Firma offer(The Business Via Thomson Dialog NewsEdge) WARNER Music is to continue going through EMIis books, despite the beleaguered music group recommending an audacious GBP2.4bn ($4.7bn, E3.5bn) bid from Terra Firma, the private equity group led by Guy Hands. Warneris advisers, Goldman Sachs and Lehman Brothers, were carrying out due diligence at the offices of Greenhill, the investment boutique advising EMI, when news of the deal came through earlier this week. It is believed that the US group behind Madonna will not decide what to do regarding EMI until due diligence is completed, which could be as soon as Friday. Warner has three options: walk away, table an offer higher than the 265p-a-share cash bid, or enter negotiations with Terra Firma to acquire parts of the business, although it is understood that Hands has already privately ruled this out. But City bankers said it was unlikely that Warner would walk away from the worldis oldest music group n EMI dates back to 1897 n without a battle. Warner has held on-off merger talks with EMI, the worldis third-largest music group having Lily Allen and Robbie Williams on its books, for several years. A conditional offer of 260p-a-share, made earlier this year, was rebuffed by EMI. John Gildersleeve, chairman of EMI, explained that Terra Firmais offer was compelling because it delivered cash now and did not require regulatory approval. There had been suggestions that a Warner-EMI tie-up would not gain regulatory approval. But concerns diminished this week after European Union regulators gave Universal Music clearance to acquire BMG Music Publishing. Bankers also pointed out that Warner would be able to achieve synergies that Terra Firma could not, enabling it to table a higher offer. Copyright 2007 The Business Ltd, Source: The Financial Times Limited |