EMI Rejects Bid. Stops Negotiations. Buys Out Japanese Partner.

EMI which has been in serious talks with investment firms about a buyout has ended. negotiations according to a state from the company this morning:

"… EMI today announces that discussions with the potential offeror have now ceased.  The EMI Board has not received an offer that fully reflects the prospects for and value of the company and which it could recommend to shareholders."

EMI’s stock price of company had soared in recent weeks on news of a possible buyout even though insiders had hinted at a 10-20% difference between the price offered and a bid that the EMI Board  of Directors would find acceptable. The stock has fallen back almost 11% as of 1PM today in London after a 24% increase for the year.

In separate news EMI announced that it is purchasing the remaining 45% of it’s former EMI-Toshiba Japanese label partnership.  EMI will now own and run the label on it’s own.  Read both full press releases after the jump.

PRESS RELEASE: EMI STATEMENT RE: PRELIMINARY APPROACH

Statement re preliminary approach
London, 14 December 2006

Further to the announcement on 28 November 2006 that EMI Group plc (‘EMI’ or the ‘Company’) had received a preliminary approach which might or might not lead to an offer being made for the Company, EMI today announces that discussions with the potential offeror have now ceased.  The EMI Board has not received an offer that fully reflects the prospects for and value of the company and which it could recommend to shareholders.

PRESS RELEASE: Acquisition by EMI Group of Toshiba Corporation’s minority shareholding in Toshiba-EMI Limited

London, 13 December 2006

EMI Group plc ("EMI") announces that it has entered into an unconditional agreement with Toshiba Corporation ("Toshiba"), whereby a wholly-owned subsidiary of EMI will acquire Toshiba’s 45 per cent shareholding in Toshiba-EMI Limited ("TOEMI"), a company in which EMI Group currently has a 55 per cent shareholding.

The total cash consideration payable on completion by EMI Group to Toshiba for its 45 per cent shareholding is JPY 21,000 million (approximately £93 million)(1).  Following completion of the acquisition, EMI Group will own 100 per cent of the shares in TOEMI.  The agreement is expected to be completed in the second quarter of calendar year 2007, or earlier if Toshiba exercises an early completion option.

TOEMI is one of Japan’s leading music companies, whose artists include GLAY, Kyosuke Himuro, Tomoyasu Hotei, Yumi Matsutoya, Sheena Ringo, Utada Hikaru and Eikichi Yazawa.

For the year ended 31 March 2006, TOEMI reported profits before tax under Japanese GAAP of Yen 790 million, and underlying profits before tax under IFRS were £11.6 million(2).  TOEMI’s gross assets as at 31 March 2006 under Japanese GAAP were £141.2 million(3).

TOEMI has been a successful joint venture partnership between EMI and Toshiba that has produced many great artists over the last decades.  Both EMI and Toshiba believe it is the right time to unify the ownership structure of TOEMI.  EMI remains strongly committed to the Japanese music market and its operations there.