If private equity makes the move to take EMI off the public market, a large number of EMI artists should quake in their boots. A smaller number might actually breath a sigh of relief that their A&R policy will no longer be conducted on the public market.
Meanwhile the current boss is quoted here as saying the CD is “over”. Seems to be the fashionable music industry thing to be saying at the moment. “Ged Doherty, the UK head of Sony BMG, has reignited the debate over the future of the record industry by predicting that CD sales will collapse by 50% over the next three years.” quoth the Guardian.
Watch this space…
Today’s Wall Street Journal is reporting the interested party is neither KKR nor Goldman’s but Permira Advisors Ltd.
Here’s the Billboard Bulletin report from Tuesday:
EMI Group plc is the target of a takeover. The British music major confirmed in a statement to the London Stock Exchange today (Nov. 28) that it has “received a preliminary approach for the company which may or may not lead to an offer being made for the company.” EMI did not reveal the identity of its potential suitor.
EMI disclosed the move after its stock soared more than 10% in morning trading to 290p, on speculation that private equity firms including Goldman Sachs Group and Kohlberg Kravis Roberts & Co. were circling. According to a report published in the Financial Times, a possible bid could be worth £2.5 billion ($4.87 billion).
In July, EMI and Warner Music shelved plans to merge in light of a European Union court decision to overturn approval of the rival Sony BMG joint venture. The previous month, EMI rejected a £2.5 billion approach from Warner Music.
BTW, this is obviously completely a side issue but one of KKR’s most recent investments is VNU Media – publishers of Billboard:
HQ: Haarlem, Netherlands and New York, NY
2005 Revenue: €3.5 billion
Chairman and CEO: David L. Calhoun
Investment by KKR: 2006
Business: VNU is a global information and media company active in over 100 countries, with leading market positions and recognized brands in marketing information (ACNielsen), media measurement and information (Nielsen Media Research) and business information (Billboard, The Hollywood Reporter, Computing, Intermediair).
But let’s face it, a bid of this kind would not be about finding synergies amongst existing portfolio companies. It seems far more likely that the assets of EMI are about to take a serious beating. EMI Music Publishing anyone? Where is that fellow Bandier when you want him? Ah Marty, there you are… well here you are… just what you always wanted…