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Last Updated: Saturday, 3 March 2007, 00:19 GMT
EMI rejects 2.1bn takeover bid
Lily Allen
Artists like Lily Allen have not been able to halt EMI's sales slide
UK music group EMI has rejected a 2.1bn takeover from Warner Music as too low, and because it would create operational and regulatory risks.

EMI, which looks after singers such as Lily Allen, Robbie Williams and Norah Jones, said it wanted to concentrate on its restructuring plan instead.

The two companies called off merger talks last year amid fears a tie-up would be blocked by regulators.

EMI is the world's third-biggest music company, while Warner is the fourth.

In London on Friday, EMI's shares rose 4.5% to 246.25 pence. Warner had offered to buy EMI's shares for 260p each.

Compelling strategy

Both companies are trying to boost flagging sales and combat the effects of piracy and illegal downloading of music.

The two companies have also suffered as their artists have produced fewer hits recently.

Warner did not comment on EMI's refusal.

A man silhouetted as he leaves an EMI building

Earlier in the week, Warner said it had approached EMI on 24 January regarding a deal, and saw "compelling strategic, commercial and financial logic" in a tie-up.

Between them, the two firms would control about 25% of the global recorded music market, according to the International Federation of the Phonographic Industry (IFPI).

Attempts to merge EMI and Warner Music date back to 2000, and analysts said the same regulatory issues that scuppered previous takeover attempts could surface again.

On Thursday, the European Commission said that it would open an investigation into its approval of a merger between the music businesses of Japan's Sony and Germany's Bertelsmann.

The new company, Sony BMG, became one of the music industry's biggest players, and the merger was opposed by a number of independent record labels

However, Warner said that it now has the support of Impala - the trade group for independent music labels that has opposed previous deals between the majors record labels including the Sony Bertelsmann tie up.


SEE ALSO
Sony BMG deal under new scrutiny
13 Jul 06 |  Business
Warner planning cash bid for EMI
21 Feb 07 |  Business
EMI receives Warner bid approach
20 Feb 07 |  Business
EMI shares fall on profit warning
14 Feb 07 |  Business
Weak album sales hit Warner Music
08 Feb 07 |  Business
EMI shares fall as executive goes
12 Jan 07 |  Business

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