Any EMI Offer Will Be in Cash -- Warner Music

| About: Warner Music (WMG)
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Warner Music Group, the world's #4 record company, said Tuesday that if it does make an offer for EMI Group, it would likely be "solely" in cash, thus avoiding the need for shareholders to notify their interests in Warner Music under British takeover rules. It said it had approached EMI about a deal, and that it had the support of Impala -- a trade group representing independent music labels that has challenged industry consolidation in the past. Warner Music 21 02 2007 ChartOver the past seven years, both WMG and EMI have at times tried to buy each other out, while struggling with a loss of physical music sales to digital downloads. Past buyout attempts have been thwarted over concerns a tieup would be blocked by EU regulators. Impala's approval of the present deal "improves the prospects for regulatory approval of a combination of WMG and EMI," the company said, adding that its offer was still preliminary, and there can be no certainty that an official offer will be made. Analysts believe the bid for EMI will be for about 260p a share; shares closed at 240p.

Sources: Press Release I, II, Bloomberg, Reuters
Commentary: EMI Shares Jump on 'Approach' from Warner MusicMedia Companies Slow to Bridge the Digital DivideWarner Music Group F1Q07 Earnings Call Transcript
Stocks/ETFs to watch: Warner Music Group Corp. (NYSE:WMG). ETFs: PowerShares Dynamic Media Portfolio ETF (NYSEARCA:PBS), PowerShares Dynamic Leisure & Entertainment (NYSEARCA:PEJ)

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