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Citigroup Likely To Sell EMI In Two Parts, Bidding Starts To Heat Up

Posted by on October 27, 2011

Though the record industry as a whole is going through a rough time, EMI has especially experienced its fair share of trouble. That’s why it’s no surprise that Citigroup Bank is anxious to sell the famed label less than a year after acquiring it from equity firm Terra Firma. And while there were reports floating around that Citigroup may abandon the sale if they can’t find bids higher than the $3 billion to $4 billion dollar range, the New York Post reports that the bank is indeed close to selling EMI and likely to split the assets in two (selling the label and publishing arms separately).

In the fight for the publishing arm, the more valuable purchase of the two, the main contender is supposedly BMG Rights Management (co-owned by New York private equity firm KKR German media Company Bertelsmann). With the bids said to be around the $2 billion range, BMG Rights supposedly has the upper hand over Sony, who though backed by Indian sovereign fund Mubadala and investment firm Raine is still having trouble with funding.

While EMI’s publishing is more valuable, the outcome of the label side might have more of an effect on the recording industry. A recent report from the New York Post puts Access Industries’ Len Blavatnik, who just recently purchased Warner Music Group, up against business magnet Ron Perelman. Though Perelman has shown great interest in buying a label, insiders tell the Post that Blavatnik is the lead bidder. If Access Industries does purchase EMI, then it could lead to the label being merged with WMG (a move that has been speculated since both labels have been up for sale). The bidding for the label division was estimated to be around the $1.3 billion to $1.5 billion range, but that was before Perelman’s name was mention in the bidding war.

While there seems to be interest from certain parties, the bidding price is certainly lower than what Citigroup was originally offering. However, this is somewhat expected considering the large debt EMI had collected prior to Citigroup’s take over, and that buying a record label isn’t exactly the best purchase nowadays. A final sale is expected to be announced as soon as by the end of this week.

[via The New York Post]

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Categorised in: Label Moves