EMI recommends bid from European equity firm over Warner

EMI Group PLC announced yesterday that it "has recommended its investors accept a cash offer for the company from European private equity firm Terra Firma" signaling that any early rumors that the Warner Music Group Corp. (NYSE: WMG) might make a successful, or at least recommended, bid were early. Chairman John Gildersleeve even called the new offer "attractive" in comparison to many of the new offers, including Warner's numerous bids. The announcement came on the heels of the company's early publication of its annual financial reports which indicated that revenues had declined.

Gildersleeve did note that the company is "in good shape" and the company "is confident in its ability to deliver its recently announced restructuring plans" indicating that the elimination of the use of Digital Rights Management (DRM) technology will continue, despite the bid and potential buyout. Terra Firma reiterated this position with CEO Guy Hands statement that the company's "objective is to build on EMI's current position as one of the world's leading music companies and accelerate the development of its digital and online strategy to fully exploit this long-term growth opportunity.

In my blog on BloggingStocks yesterday, I wondered if EMI's position on DRM would stay if it was sold, especially to Warner. Fortunately, my worries were too early, as indicated from this announcement posted by Billboard yesterday. Hopefully this announcement will mean the end of the continuous rumors about Warner buying EMI that have persisted over the past seven years.