Report: Warner Music Prepared to Sweeten Bid for EMI

The London Observer, citing Wall Street sources, reports that Warner Music CEO Edgar Bronfman is prepared to sweeten his offer for struggling London-based music company EMI, provided EMI confirms it will consider a revised offer. On March 2, EMI announced that it had turned down a non-binding offer from Warner Music to purchase the company for 260 pence per share on the grounds that it "wasn't in the best interest of its shareholders and undervalues the company." EMI also cited regulatory uncertainty that would accompany the proposal and operational risk the company would incur. EMI, which suffered poor holiday sales from major artists like Robbie Williams and is facing a weak U.S. market, has issued two profit warnings since the start of 2007. Warner Music is not commenting on the development.

Sources: London Observer, MarketWatch, ABCMoney
Commentary: Any EMI Offer Will Be in Cash -- Warner Music • EMI Shares Jump on 'Approach' from Warner Music • EMI Group The Next Company To Go Private?. Conference call transcript: Warner Music Group F1Q07 (Qtr End 12/31/06)
Stocks/ETFs to watch: Warner Music Group Corp. (WMG), EMI Group plc (EMIPY.PK). Competitors: Sony (SNE). ETFs: PowerShares Dynamic Media Portfolio ETF (PBS), PowerShares Dynamic Leisure & Entertainment (PEJ)

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