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EMI rejects Warner bid

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EMI's board today rejected an approach by Warner Music Group, saying the price was too low and the format of the bid too cumbersome.

"WMG’s proposal was considered by the Board which concluded that it is not in the best interests of EMI shareholders to entertain a pre-conditional offer which would entail prolonged regulatory uncertainty and unacceptable operational risk at a critical time for the Company," the music group said in a statement issued late on Friday afternoon, UK time.

"The Board also regards a price of 260 pence per share as inadequate, having regard to the stand-alone value of EMI, the synergies available from a combination with WMG and the risks identified above."

Warner Music first courted EMI seven years ago, but in October 2000 the pair broke off from a proposed merger as they didn't think regulatory approval would be forthcoming. In 2004, EMI tried to get hitched to Sony-BMG, but a legal challenge from the independent label sector sank the deal last year.

This time, the only stumbling block seems to be the EMI board itself.

Warner has agreed terms with the independents' global trade group Impala which sees the indies back the merger in return for concessions on divesting repetoire, competition pledges, and financial backing for Merlin, the indies' new global digital music licensing agency.

The UK label Ministry of Sound quit the UK indie label trade group AIM in protest at the deal, although it's believed that MoS doesn't know what the specific pledges are. An independent source told us that MoS had declined to sign an NDA allowing it to view the Impala-Warner agreement. ®

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