Warner-EMI merger OK’d by shareholders

Investigation extended 4 months

LONDON — EMI shareholders have overwhelmingly approved the music major’s $20 billion merger with Warner Music.

At EMI’s extraordinary general meeting Monday, over 99% voted in favor of the merger — despite reports that a consortium led by Spanish telco Telefonica is planning a $9 billion counterbid for EMI (Daily Variety, June 26).

But the creation of Warner EMI Music, which will be the world’s biggest record company, still faces hurdles.

EC adds four months

Signaling that there are concerns, the European Commission has extended its investigation of the merger by four months — which provides additional time for a possible rival bid.

Reports of Telefonica’s interest emerged late last week. Some now say that the other two companies in the consortium are German media group Bertelsmann and Hong Kong tycoon Richard Li’s Pacific Century Cyberworks.

Bertelsmann chief exec Thomas Middelhoff has stated that he wants BMG to be the world’s No. 1 music company.

But Bertelsmann cannot be directly involved in a hostile bid because it has sales and distribution arrangements with AOL, parent-to-be of Time Warner. Bertelsmann has links to Telefonica and so could benefit through the back door.

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