Murdoch denies plan to purchase EMI

Click to follow
RUPERT MURDOCH yesterday denied any immediate interest in acquiring EMI, the British music group, but admitted that he was "watching the situation with interest".

Responding to reports of meetings between senior executives at News Corp, his media empire, and those at EMI, Mr Murdoch said there were no plans for a deal.

"We have looked at music many times, but it is a constantly changing scene. I am too worried by values put on music at the moment," he said. "However, I would be lying if I said I was not watching with interest."

EMI had been forced to issue a statement late on Friday after the company's shares surged by 17 per cent on speculation that News Corp was planning to strike. EMI said no meetings had taken place between the two sides.

Shares in EMI, which reports half-year figures today, fell by about 7 per cent to 365p yesterday after Bertelsmann, the German media group, dismissed as "pure nonsense" suggestions that it was planning to merge its music interest with EMI's. "BMG [Bertelsmann's music division] is large enough on its own," the company said.

However, EMI admitted that talks had taken place between the two sides a month ago. The talks concentrated on possible areas of co-operation but broke up without agreement. Analysts said that any deal between EMI and Bertelsmann was likely to focus on distribution.

Lorna Tilbian, media analyst at WestLB Panmure, said: "One of the big cost areas for publishers - whether it is in music, books or newspapers - is distribution. Where revenues aren't growing, you might try and share the costs."

EMI has been hit by slowing music sales and a weaker roster of album releases. Its figures were boosted last year by hits from the Spice Girls, The Verve and Radiohead. This year Robbie Williams' solo album has been a high point but other acts such as The Smashing Pumpkins and Janet Jackson have disappointed.

EMI is expected to report a sharp fall in half-year profits from pounds 75m to around pounds 50m.