Seagram the most likely suitor for EMI

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The Independent Online
WITH Canadian distiller and entertainment group Seagram still the front runner among bidders for EMI, industry insiders say the sale of the UK's biggest record company to North America will not have a big impact on the industry here.

Seagram is the most logical strategic partner for EMI, although names of other potential bidders have continued to emerge since EMI confirmed it had been approached by a suitor last week.

"The UK record industry has always had a high level of reinvestment and that won't change whoever owns EMI," said an executive of a foreign-owned label.

Even so, it would mean that three of the world's leading five record companies would be owned by North Americans, with only Polygram and Bertelsmann flying the flag for Europe.

EMI, whose array of artists include the Spice Girls, has reportedly been in talks with Seagram for months about a potential merger of Seagram's Universal Music with EMI. Speculation about other buyers has focused on the big entertainment conglomerates without music arms, including Walt Disney, the Tracinda group - owned by Kirk Kerkorian who controls the MGM/UA studio - and Viacom.

Disney, which has sized up EMI in the past, may be the only serious contender alongside Seagram from the US entertainment business. EMI and representatives for Mr Kerkorian denied reports that the corporations had discussed a bid, and Viacom chairman Sumner Redstone said last week he was not interested in EMI.

Mr Redstone said in an interview in the Los Angeles Times that he was not in the race for EMI, because the music industry was not attractive. Global sales data released by the International Federation of the Phonographic Industry showed that world sales were down to $38.1bn (pounds 23bn) in 1997 from $39.8bn in 1996.

EMI cautioned shareholders that a bid might not materialise. EMI may be over-priced at the 580p-a-share price Seagram was considering, which values EMI at around pounds 4.6bn. But some analysts say this is low considering EMI's line-up of artists.