Universal back in talks to buy EMI labels: sources
By Yinka Adegoke and Peter Lauria
NEW YORK (Reuters) - The world's largest music company, Universal Music, is back in talks to buy EMI's labels, according to sources, raising the specter of an anti-trust battle after a music trade body said it asked regulators to block the bid.
Universal, which is owned by French media and telecoms giant Vivendi SA, returned to the auction this week after pulling out in a dispute with EMI's owner Citigroup over assuming responsibility for EMI's pension liabilities.
One person close to the auction process cautioned that the chances of a Universal deal happening were "still 50-50" due to the regulatory risk and the need for approval from Vivendi's board.
Universal's decision to pull out from bidding less than a fortnight ago had seemed to position billionaire Len Blavatnik as the front runner with his ambition to save millions of dollars in costs by combining EMI's labels with Warner Music Group, which he bought for $3.3 billion in May.
But Blavatnik walked away late last week, according to two people familiar with the talks, after he was unable to convince Citigroup to accept his offer of about $1.5 billion. However, Blavatnik's representatives have stayed close to the process in case of any changes.
After Blavatnik bought the company, Edgar Bronfman, who has also long held a hope to combine EMI with Warner Music, gave up the chief executive role, in August, but remains chairman of Warner Music. Bronfman is expected to leave by the end of the year if Blavatnik doesn't win EMI.
Universal's bid for EMI is a risky move in that it could face a costly year-long regulatory process since it is already by far the world's largest music company. The Wall Street Journal reported on Tuesday Universal Music was in advanced talks to win the bid.
Impala, a European independent music companies body, said on Tuesday it would oppose any attempt by either Universal or Sony to buy EMI and already requested the European authorities to investigate all options to intervene. Continued...