EMI, home to Goldfrapp, Keith Urban and Kylie Minogue, said in a notice to the stock exchange that it had "received a number of preliminary indications of interest to acquire the company". It would not say how many, but there was renewed speculation of interest by Fortress, which this year became the first hedge fund and private equity group to be floated on the New York stock exchange. Fortress did not return calls.
The news of potential suitors follows EMI's rejection in March of a tentative 260p-a-share offer from its US rival, Warner Music Group, home to Madonna. The two have been in a tit-for-tat take-over battle for years; a tie-up would bring substantial cost-savings and go some way to solving EMI's weakness in the all-important US music market. The whole industry has suffered from falling sales, and earlier this year Warner came up with a deal to smooth the regulatory path to a merger with its London rival.
It stunned the industry by revealing it had the backing of the independent music lobby group Impala, which derailed the 2004 Sony/BMG merger. Impala pledged full support to a Warner-EMI merger, in return for promises of better cooperation and funding for a new global licensing system. Given the effort put into the deal, Warner is unlikely to want to walk away from EMI.
Warner could extract significant synergies, and private equity may well struggle to top any Warner bid. EMI shareholders have had a barrage of bad news - two profit warnings five weeks apart early in the year, and last month the suspension of dividend payments. It reports preliminary results on May 23, and shareholders would want clarity on buyout prospects.
But Patrick Yau at Bridgewell said: "We expect little respite in the tough trading conditions."
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