EMI setback as Bronfman strikes chord with Warner
Saturday 22 November 2003
The British recording giant EMI was pondering a bleak future yesterday after it became clear its bid for the music division of Time Warner was disintegrating in the face of a richer offer from a group of investors headed by the Seagram scion, Edgar Bronfman.
Shares in EMI, which has twice before tried and failed to merge with another of the big recording companies, took a beating, at one time falling almost 11 per cent before recovering slightly on hopes that the Bronfman-Warner deal could yet unravel. They closed down 6.5p at 163p.
The acquisition of both the recording and music publishing interests of Time Warner would represent a stunning turnaround for Mr Bronfman, who has found himself out in the cold since the disastrous sale of Seagram to Vivendi three years ago.
The Bronfman consortium, put together with the children's television mogul Haim Saban and other equity groups, had been considered the dark horse in the race to win the Time Warner assets. But at a board meeting on Thursday, directors of Time Warner agreed to pursue an offer from the group valued at $2.5bn (£1.5bn).
However, all may not be lost for EMI, which previously attempted to merge with Warner Music and, on a different occasion, with Bertelsmann's BMG. Time Warner has given Mr Bronfman only until Sunday to finalise his offer. If the deadline is not met, the media giant could invite EMI back to the table.
Simon Baker, an analyst at SG Securities, said: "This is bad news for EMI. Warner Music is moving further down the horizon, if not disappearing altogether. But it is not out of possibilities and that is why the shares are not down more severely."
Mr Bronfman's involvement in the media industry began in 1995 when he decided that Seagram needed to add fizz to its staid beverages and chemicals portfolio. In a series of multibillion-dollar deals, he took control of Universal Studios and created Universal Music Group, the world's biggest record conglomerate.
He seemed to crash, however, after the sale of Seagram to Vivendi, the French water utility headed by Jean-Marie Messier, in 2000 for $34bn in stock. With Mr Bronfman at his side, Mr Messier envisaged turning Vivendi into a media powerhouse, but the company was soon swamped by debts and a collapsing stock price.
When Vivendi capitulated earlier this year and moved to sell its entertainment interests, Mr Bronfman attempted to buy them back. But he was pipped by General Electric, which already owns NBC in America. Mr Bronfman's media ambitions seemed to have been thwarted for good. By Sunday night, however, he may be firmly back in the saddle.
- 1 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 2 Have sex with your iPad thanks to the new sex toy no-one asked for
- 3 The 'sex selfie stick' lets you FaceTime the inside of a vagina
- 5 Why you're almost certainly more like your father than your mother
Out-of-touch MPs ‘don’t get it’, says ex-Civil Service chief
Mark Zuckerberg: Facebook CEO's one simple test for who to hire
Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...