Move due to recent decline in rev
LONDON — EMI Group may sell its recorded music division to avoid a hostile takeover of the company.Speculation is rife that the company is considering various strategies in order to fend off the possibility of becoming a cut-price acquisition target. Last week, EMI admitted its record division is facing a 15% decline in revenues, which caused the group’s share price to plummet and left the music major vulnerable to a takeover. Another mooted move for EMI is a re-financing of the EMI Music Publishing division, which, unlike the struggling recorded music labels, consistently delivers revenue and profit growth. In a bid to cut costs, EMI is going through a staff cull, which will result in the workforce being reduced by about 1,000 employees. Prior to the restructure, the company employed about 6,300 worldwide. With labels such as Angel, Blue Note, Capitol, Parlophone and Virgin and acts including the Beatles, Coldplay, Norah Jones, Joss Stone, Janet Jackson, Robbie Williams and Radiohead, the sale of the record division — or parts of it — would undoubtedly lead to massive interest among EMI’s rivals, Universal Music, SonyBMG and Warner Music. The latter has been keen to pursue a merger with EMI for a number of years and is thought to be preparing another bid in the coming weeks. Meanwhile, the boss of London-based hedge fund Eclectica, Hugh Hendry, is calling for a seat on EMI’s board. Hendry told financial newspaper City A.M. “EMI has issued two profit warnings in two months, it’s dismissed the head of the recorded music division Alain Levy, there’s been an accounting scandal in Brazil and it’s rejected two takeover proposals — surely somebody can do something better.”
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