EMI Rejects $4.1 Billion WMG Bid

EMI has rejected a $4.1 Billion "non-binding" cash offer from The Warner Music Group and now it appears WMG will take its time before making another offer opting to take the time to do proper due
diligence.

Last week’s offer was apparently came with a pre-condition that the merger receive European Union approval.  Fear that such approval might not be easily received previously sent EMI looking for suitors in the private equity sector who don’t have enough music in their portfolios to
trigger an EU rejection.

But why would WMG bother to make an offer with pre-conditions that were almost certain to be rejected?  Perhaps because there was a small chance a beleaguered EMI just might have agreed to any port in the storm. But foremost because Warner has now set a high bar that any private equity firm must exceed or risk shareholder wrath. 

It will probably be a long slow dance for EMI and WMG as both wait to see the outcome of the EU’s review of the Sony BMG merger which is expected by July.

For their part, EMI promised to continue with the restructuring plan announced on late January even as they open their records for review by both WMG and private market suitors.

For More: EMI Statement, The Guardian, LA Times