emi set to be sold

EMI set to be sold


Andrew Edgecliffe-Johnson December 15, 2006
EMI has bought out its Japanese joint venture partner, clearing a potential obstacle in the way of completing a pound stg. 2.5 billion ($6.25 billion) sale of the London-listed music company to private equity firm Permira.
Sources said questions about change of control conditions in the joint venture had been one issue standing in the way of completing a deal, two weeks after EMI acknowledged it had received a takeover approach.
EMI is understood to have agreed to talks after Permira indicated it could offer more than 320p a share -- the price at which EMI rejected an earlier bid from Warner Music.

The progress of the discussions was unclear yesterday, however, as some industry executives said EMI's weak trading in the important Christmas season could weigh on the price Permira would be willing to pay.

EMI said it would pay Y21 billion ($228 million) in cash to buy Toshiba's 45 per cent stake in Toshiba-EMI, or TOEMI, ending its partnership with the Japanese electronics company.

The acquisition is due to be completed in the second quarter of 2007 unless Toshiba exercises an early completion option. TOEMI reported pre-tax profits of Y790 million in the year to March and underlying profits before tax of Y11.6 million under IFRS accounting standards, EMI said. Its gross assets on March 31, 2006, under Japanese GAAP were Y141.2 million.

EMI said: "TOEMI has been a successful joint venture partnership between EMI and Toshiba that has produced many great artists over the last decades. Both EMI and Toshiba believe it is the right time to unify the ownership structure of TOEMI." EMI said it remained strongly committed to the Japanese music market.