Terra Firma purchase now assured
The record company of Coldplay and Norah Jones has been sold to private equity.Terra Firma’s £3.2 billion ($6.4 billion) bid for EMI was officially accepted by 90% of shareholders, giving Terra Firma the right to buy the music firm and ensuring that the world’s fifth-largest record company will go private. Warner Music and EMI had been in an elaborate dance for more than a year about a potential merger. But last month WMG said it would not make a bid ahead of a deadline, leaving Terra Firma as the only player. Shareholders were originally slow to approve the offer. Terra Firma extended its offer deadline no fewer than five times before securing the requisite number of votes Wednesday. WMG still could participate in an offer for EMI’s recorded music and music publishing company, which could be sold off. That division is considered one of the most valued EMI assets; its catalog includes the work of artists such as the Beatles, Radiohead and Frank Sinatra. Investors in the U.K., where EMI’s stock trades, liked the deal, sending the stock up 4%, though music-biz observers are concerned that the new owners will attempt to streamline operations to cut costs. Deal ends speculation about the future of the company, which has undergone a series of changes and some financial struggles as it had engaged in the mating dance. Stock has dropped more than 10% since its 52-week high in December. The purchase means that the music biz will avoid further consolidation, a trend European regulators have recently frowned upon. Still, it reps a private-equity buy of an entertainment company at a time when the frenzy for such mergers is beginning to fizzle out.