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Might BMG take a stake in EMI publishing?
By CMU Editorial | Published on Friday 28 May 2010
Hey, it’s been at least ten days since we last published some idle EMI speculation, which is no good at all. So, here’s some more.
The New York Post reckons that Terra Firma may be helped out of its continued EMI-related woes by a rival equity outfit, Kohlberg Kravis Roberts, who own half of the BMG Rights Management company, and who were tipped as possible buyers for EMI Music Publishing had bankers Citigroup forced a sale of the London-based music major.
The Post reckons that Terra Firma and KKR are in talks about spinning off EMI Music Publishing as a stand alone company, 51% owned by the EMI Group, and 49% owned by KKR, who would most likely assign their stake to BMG.
The deal would bring in some much needed funds into EMI. Although Terra Firma did find £100 million or so to gift to the music company so it could meet the covenants of its Citigroup loan, the equity group had hoped to raise £360 million, to help fill a hole in the company’s pension fund and to ensure future loan commitments are met.
But Terra Firma’s backers weren’t that keen to prop up their music asset, meaning that while EMI avoided Citigroup foreclosing on their loan next week – as might have happened – the long term future of the music firm is currently far from assured.
The Post quote a source who says: “This move [the KKR talks] does not surprise me. EMI only got enough money to survive another six months before they need to raise money again”. The Post also reckons Terra Firma might be talking to others about taking a stake in a spun off EMI Publishing.
