After years of hand holding with Warner Music, EMI has dumped its suitor at the altar and run off with a new flame.
Private equity group Terra Firma Capital Partners Ltd has agreed to buy the major record company for £3.2 billion.EMI has been courting Warner since 2000. The on again, off again relationship looked like it was finally going to happen just a few months ago but was rejected when EMI once again went cold on the deal.
Earlier this week, EMI announced a drop of 15.8% in revenue for the financial year. Most of the loss came from the record company division while the publishing company stood steady with a loss of only 0.9%.
The growth area for the company was digital revenues, up 46.5% on the previous year.
Active music assets for the group include:
EMI Music - Corinne Bailey Rae, Depeche Mode, Herbert Groenemeyer, Joss Stone, Keith Urban, Lily Allen, Norah Jones, RBD, Robbie Williams, The Beatles, The Kooks, 30 Seconds to Mars and Utada Hikaru
EMI Music Publishing - Amy Winehouse, Arctic Monkeys, Beyonce, Fergie, Gym Class Heroes, James Blunt, Jay-Z, Nelly Furtado, Norah Jones, Scissor Sisters and Vasco Rossi
The label also owns the Beatles catalogue.
Certain territories for EMI were listed in their financial statement as trouble spots. One was Australia. "Market conditions in Australasia worsened during the 2006/07 financial year. EMI Music's market share was modestly down. During the year, we generated releases from local superstars, The 12th Man and Silverchair, as well as selling international titles from The Beatles, Norah Jones and Robbie Williams. Our restructuring programme has already been implemented in the region. iTunes launched in New Zealand during December 2006 and this leaves the region well placed for growth in the digital market" the statement said.
EMI ranks last in the group of four majors. Terra Firma says that it will solidify and improve the company's performance. However, it is unclear at this stage how new chairman Guy Hands plans to go about this.
One option for Terra Firma is to slice up EMI and sell off the pieces. As an investment company, it has no emotion for the product, only for the stock price.
However, the cash is all the current owners of EMI seem to care about as well. EMI's chairman, John Gildersleeve, said that the Terra Firma offer "is the most attractive offer received and delivers cash now, without regulatory uncertainty and with the minimum of operational risk" to EMI.
