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EMI on track to be bought by UK private equity firm

EMI on track to be bought by UK private equity firm
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The British Music company EMI is recommending to shareholders that they accept a 3.5 billion euro cash offer from Terra Firma, a UK based private equity firm. The board said in a statement that it considered the offer to be “fair and reasonable”. It values the company at 4.7 billion euros including debt.

EMI’s shares closed up 9.3%. That suggests that investors believe a higher counter bid is a possibility.

EMI, is one of the world5;s four largest recorded music groups. Last year it had 13.5% of the market share of music sales in the world. Warner Music, which has 11.3% of the market has repeatedly tried to buy EMI. With this move it has been rebuffed along with three other US private equity firms who were prepared to bid.

Terra Firma said it plans to accelerate the development of EMI’s digital and online strategy. At the same time the bid was announced, EMI said had lost 380 million euros in the past year.