Chrysalis boosted by EMI bid talk

David Bowie is one artist signed to the Chrysalis music label

Shares in UK record label Chrysalis have jumped by as much as 10% on reports that EMI's private equity owner Terra Firma has made it an offer.

Both firms declined to comment on the Times' report, but Chrysalis - whose artists include David Bowie - has said it is in talks with interested suitors.

Chrysalis sold its radio arm last year, leaving it with its music publishing business as its sole interest.

The rumours come as Terra Firma plans sweeping job cuts at the EMI label.

On Tuesday EMI said it would cut between 1,500 and 2,000 jobs worldwide as part of plans to reduce costs by £200m a year.

Shares in Chrysalis initially surged by 10%, but later lost ground to trade up 7.50 pence, or 7.50%, at 106.5p in London.

Consolidation

Guy Hands, the boss of Terra Firma, has suggested to investors in the past that there is potential for consolidation in the shrinking music industry - as falling CD sales make deep cuts into its traditional earnings.

He bought EMI, whose artists include Kylie Minogue and Coldplay, last year for £3.2bn and has embarked on a huge cost reduction programme, which includes cutting its global workforce by about a third.

Fears that EMI will start to take a larger share of money made from concerts and merchandise, while cutting its marketing budget, has angered artists.

Robbie Williams and a number of others are reportedly considering their future with the label.

On Thursday The Rolling Stones said they had signed a one-album deal with Universal to release a live CD recorded in New York in 2006. It came as the band considers its options, ahead of its record deal with EMI ending in February.

Analysts say if Mr Hands is considering buying Chrysalis, one of Britain's last big independent music groups, he could face a fight from Warner Music, which was scuppered in its efforts to buy EMI.

In a trading update earlier this week, Chrysalis said it was "confident" that it would achieve its target level of growth in the second half of the year with new releases from chart acts, including Feeder, expected.