Another EMI 'buyer' drops out

Following Tuesday's announcement that Warner Music Group (NYSE: WMG) had dropped its plans to make a bid for London-based EMI Group PLC (LSE: EMI), Billboard.com reported yesterday that former EMI CEO Jim Fifield and Bidco, a firm backing any potential offer by him, had also dropped plans to acquire the English music giant. Like WMG, they still retain a six month window to make an offer.

EMI has reportedly contacted shareholders and reaffirmed the board member's commitments to the May offer from European private equity firm Terra Firma for 265 pence per share. That bid now sits higher than the closing price of EMI shares yesterday, 261.75 pence, five pence below Tuesday's closing price. Between July 5 and 12, EMI had enjoyed a boost rising well into the 270s, but the stock fell after a third deadline announcement by Terra Firma. Announcements by Warner and Fifield about dropped plans to counterbid for the company have obviously hurt the stock even more.

In addition to stock deceleration, another report on by Billboard.com yesterday indicated that in physical and digital sales of music last year, EMI accounted for only 12.8% of combined sales. WMG accounted for 13.8% which means a combined WMG-EMI company only a 0.9% lead over industry leader Universal Music Group's 25.7%, and just 0.1% over all independent music labels. One has to wonder if EMI's large steps this year into the digital world will make any lasting dent in the company's sales.