EMI in early merger talks with Warner: source

NEW YORK (Reuters) – EMI Group is in early talks to buy
smaller rival Warner Music Group in the third attempt in more
than five years to bring together the two music companies, a
source familiar with the matter said late on Tuesday.

EMI Group chairman Eric Nicoli made the offer to Warner
Music chairman Edgar Bronfman, Jr. to combine the world’s third
and fourth biggest music companies earlier this week, the
source said, but added that the discussions were still at an
early stage and could fall apart.

Representatives of EMI and Warner declined comment on what
both companies called “rumors and speculation.”

Any deal could be worth more than $5 billion, or about $30
a share, according to a report on business cable news channel
CNBC and the New York Times’s Web site. The figures could not
be confirmed.

Warner Music shares closed on Tuesday up 29 cents at $27.29
on the New York Stock Exchange.

In 2003, EMI lost out to a consortium of private equity
companies led by Edgar Bronfman, Jr. in its bid to buy Warner
from Time Warner Inc. for an estimated $3 billion.

At the time, Time Warner opted to sell the division to the
Bronfman-led consortium to by-pass regulatory concerns.

News of the early discussions were first reported by
Britain’s Sunday Times.