Will Anyone, Can Anyone Buy EMI?
It appears that Guy Hands has convinced shareholders to buy EMI another year of life. But what's next?
Hits have not been EMI's problem. They actually been on a bit of a winning streak recently. Servicing it's massive debt is the core issue for EMI, and marquee catalog artists from Radiohead to The Rolling Stones, Paul McCartney and reportedly Queen leaving for safer harbors has to hurt the bottom line. That leaves the sale of EMI one of its few viable options.
A debt ridden company in a struggling industry is hardly likely to cause a bidding war.
Vivendi owned Universal Music Group is a logical choice. But several sources tell Hypebot that the world's largest music group is concerned that anti-trust issues ,particularly in the EU, could hold up any purchase of EMI for years. Sony, whose CEO publicaly admitted interest last week, would face similar obstacles.
That leaves WMG the most logical suitor. CEO Edgar Bronfman Jr. would probably have preferred to negotiate with a bank wanting to get a pesky music company off its books rather than investors hoping for some return; and WMG's cash position is less fluid. Despite the obstacles, rumors have Bronfman preparing his options, gathering potential partners and quietly waiting for the right moment to strike.