S to sell iconic music group EMI looked shaky yesterday after the lead bidder for its recorded music arm walked away claiming that the seller, Citigroup, wanted too high a price.
Len Blavatnik, the new owner of EMI’s US on-off suitor Warner Music, has tabled a $1.5bn (£930m) offer for EMI’s recorded music business, home to the Beatles’ back catalogues as well as artists such as Lily Allen.
But Citi has been insistent that the division is worth far more, and sources familiar with the situation told City A.M. Blavatnik became frustrated with negotiations. EMI’s history, in which private equity firm Terra Firma paid a vastly inflated £4.2bn for it in 2007, made Blavatnik wary of over-valuing it now, they said.
“That asset becomes less valuable the longer Citi holds it because it is in paralysis; it can’t recruit new staff or sign new artists,” one said. “I know it took a massive writedown on EMI but you would have thought it would be time to sell and move on.”
Sources close to Universal Music, which has also expressed an interest in EMI’s recorded music arm, said the firm was closely monitoring the situation but expects Warner to return to the negotiating table.