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EMI in early merger talks with Warner: source

Posted on: Wednesday, 3 May 2006, 00:23 CDT

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.

Source: REUTERS

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