Fundraising

Ex-EMI boss may trump Hands bid

EMI’s share price rose further above Terra Firma’s £2.4 billion accepted offer price, as the markets reacted to rumours of two possible counter-bids.

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Former EMI chief executive Jim Fifield has confirmed that he is still interested in making an offer for the music group, despite it agreeing a £2.4 billion ($4.8 billion, €3.5 billion) deal with Guy Hands’ Terra Firma earlier this week.

Fifield said in a statement that he “remains interested in potentially making an offer for EMI,” in response to speculation that he had teamed up with investment vehicle Corvus Capital to launch a counter-bid.

The New York Post reported earlier this week that Fifield and Corvus would make a 278 pence a share bid for EMI, 13 pence higher than Terra Firma’s recommended offer.

Corvus said earlier this week that it has the “necessary funding” to make an offer for EMI, but claimed it had no intention of making a counter-bid following the recommendation of Terra Firma’s offer. One market source said the tone of the statement suggests it is “highly unlikely” that Corvus would submit another bid.    

However, Fifield said Corvus’ decision to drop out of the bidding did not preclude him from making a bid separately, even though he admitted he had previously been working in partnership with the group.

At 14:14 GMT, EMI’s shares were up 1.75 pence to £2.74.   

Meanwhile, UK magazine The Business reported that Warner Music is continuing its due diligence with EMI’s broker Greenhill and will not rule out a bid until this is completed – probably in the next few days. The magazine said Warner may also consider teaming up with Terra Firma instead of tabling a rival offer, although Hands is believed to have privately ruled this out.

A market source said: “If Warner does make a bid, shareholders will want a sizeable premium because the deal will be heavily regulated and may fall through – which leaves Terra Firma in quite a strong position.” The share price change is probably due to hedge funds “having a bit of a punt”, he added.

Warner has been interested in EMI for some time. Its first two bids – in 2000 and 2003 – fell foul of the regulators, while last year the two groups abandoned a merger following a European Court ruling against a similar deal between Sony Music and BMG.  In February, Warner submitted another bid for EMI at 320 pence per share or £2.1 billion, but the offer was rejected.