Citigroup approaches Blavatnik about EMI?
By CMU Editorial | Published on Monday 16 May 2011
There were reports this weekend that Citigroup has already approached Len Blavatnik about his company Access Industries acquiring EMI and merging it with his most recent acquisition, Warner Music.
Speculation has been rife, of course, since it became clear Warner’s board would approve Blavatnik’s bid to buy Warner, that the Russian-born US billionaire would then mount a bid to purchase EMI, which current owner Citigroup is known to be keen to offload. Warner boss Edgar Bronfman Jr, who will continue to run the US music major for Blavatnik, has had a long desire to merge EMI and Warner to create a music company of similar size to Sony Music and Universal Music.
Citigroup is expected to start taking formal offers for London-based EMI this side of the summer, but according to the Mail the US bank has already reached out to Blavatnik to assess his interest in bidding for the EMI business. It is thought that if Blavatnik and Bronfman did succeed in bringing the Warner and EMI music empires together, the two firm’s record companies would be merged while the Warner Chappell publishing catalogue would be sold off, possibly to satisfy the concerns of competition regulators.
That said, Blavatnik is not assured ownership of EMI even if he and Bronfman do bid. It is thought several of the other individuals and companies who unsuccessfully bid to buy Warner will also make an offer for EMI when Citigroup makes a formal call for bids.
In related news, a minority shareholder in the Warner Music Group has launched litigation in relation to the sale of that music major to Blavatnik. Barbara A Varipapa says that the Warner board, who collectively own about 56% of the music firm, “abandoned their duty to [other] shareholders” when they agreed to sell the company to Access Industries.
Seeking to represent all of Warner’s shareholders outside the board room, Varipapa argues the Warner board failed to get her and other shareholders the best deal, adding that because of the way the company is structured the minority shareholders’ vote is meaningless. Warner ais yet to comment on the legal action.