EMI back on the market as Citigroup seeks exit strategy

EMI, the record label whose artists include Tinie Tempah and Gorillaz, has been officially put up for sale by its investment banking owner, Citigroup, which seized control of the group earlier this year.

EMI Group Global, which has been controlled by Citi since February, said it had "initiated a process to explore and evaluate potential strategic alternatives, including a possible sale, recapitalisation or initial public offering for the company". A sale is believed to be the preferred outcome.

A source close to the situation said Citi had waited several months to start the formal process of divesting EMI, because it wanted to wait until the business had stabilised. The group has also been pulling together "certain amounts of information" in preparation for forthcoming negotiations.

It is believed that some groups, including Warner Music Group, have expressed their interest in a potential deal to buy EMI, but there has not been a formal approach as yet.

Citi seized EMI off Terra Firma after the private-equity group defaulted on its loan repayments. The initial buyout was spearheaded by Terra Firma's chief executive, Guy Hands, in 2007, shortly before the collapse of the leverage bubble. This, and the structural shift in the music industry to digital, left Terra Firma struggling with £3.2bn of debt, mainly provided by Citi.