Today in Music: EMI to be put out of its Terra Firma misery soon?
We’re all a little tired of writing about the imminent demise of EMI, home to the Beatles, Pink Floyd, Coldplay and Robbie Williams, simply because it hasn’t happened in all the years of writing it.
Well, the storied British music company might disappear in March if its private equity owner Terra Firma trips an upcoming debt covenant test. Even before that happens the UK’s Observer paper says EMI could be “within weeks”of being owned by Citigroup, to whom Terra Firma owes a truck load of cash with which it used to buy EMI in 2007. It says Terra Firma founder Guy Hands is exploring an option to exit before the March deadline.
And in a sign of Terra Firma’s increasing desperation as the debt deadline nears it appealed a US court decision that dashed its hopes for compensation from Citigroup as my colleague Simon Meads writes here from London. Terra Firma had tried to claim late in 2009 that Citigroup duped it into overpaying for EMI.
It may just be a delaying tactic but it could still work. If it doesn’t work in Terra Firma’s favor, as many expect, then the company could end up being split with the labels sold off to Warner Music Group and the song publishing business sold off to BMG Music Rights, the joint venture of German media giant Bertelsmann and private equity firm KKR.
The combined price today for both the group could be around 1.5 billion pounds ($2.3 billion) says the Observer. A little more than three years ago Terra Firma paid $6.2 billion for EMI. It’s probably way too late now but: Ouch!
Above is a Reuters photo of Chris Martin of Coldplay. He’s probably just been told of the sums involved.