LONDON EMI withdraws offer to buy Warner Music's division
A new and more lucrative offer has arisen for Time Warner's music division.
LONDON (AP) -- Music company EMI Group PLC said today it has withdrawn its offer for the purchase of Time Warner's recorded music business.
"We have concluded that it is no longer possible to reach an agreement on terms which would be acceptable to both parties and in the interests of EMI's shareholders," Eric Nicoli, EMI chairman, said in a statement.
EMI entered nonexclusive discussions with Time Warner on Sept. 22 about the possible purchase of Warner Music's recorded music division. While EMI did not say how much it was offering, published reports have said it offered about $1 billion in cash plus a stake of about 25 percent in a merged company.
Nicoli said Friday that he had been informed by Time Warner that a second suitor had emerged with a competing bid.
His statement didn't identify the second bidder for Warner Music Group, which is home to artists like Madonna, R.E.M. and the Red Hot Chili Peppers, and Time Warner had no comment.
Entertainment industry sources who spoke on condition of anonymity said Time Warner is considering a $2.5 billion offer from former Universal Music head Edgar Bronfman Jr. and Hollywood billionaire Haim Saban.
Had been front-runner
Until the other offer emerged, it had appeared that EMI, the world's third-largest music company, was the front-runner to buy Warner Music.
EMI, whose artists include Robbie Williams, Kylie Minogue and Radiohead, said in Monday's statement that its goal is to drive shareholder value.
The company also announced its interim profit results last week, revealing that its profit sank in the first half of its fiscal year.
However, last year's profit was distorted by a one-time gain of 181.1 million pounds on EMI's sale of its HMV Group music store business.
A year-to-year comparison of profits from EMI's core business showed only a slight decline. Net profit excluding exceptional, nonrecurring expenses, fell by 4 percent to $46.9 million in 2002.
In a shrinking music market, EMI's recorded music division increased its global market share by around 1 percentage point to 12.9 percent over the six-month period, thanks to strong sales by artists including Norah Jones and Coldplay, the company said. EMI said it boosted its U.S. market share by around 1.5 percentage points to 11 percent.