EMI Agrees to $4.7-billion Offer From Terra Firma

May 25, 2007

British music company EMI agreed to a $4.73 billion (2.4-billion-pound) cash takeover from private equity group Terra Firma. Terra Firma intends to keep EMI intact and proceed with plans to securitize the company's music publishing assets, according to a source. Buyout mogul Guy Hands did not have a management team lined up to take over. The deal put a value of $6.35 billion on EMI, home to such artists as Kylie Minogue and Norah Jones. The agreement includes a break fee of $47 million if EMI pulls out. If accepted by shareholders, the deal would bring an end to the seven-year standoff between the world's third-largest music company, EMI, and the fourth-largest, New York-based Warner. EMI was advised by Greenhill, Citigroup, and Deutsche Bank, while Terra Firma was advised by Dresdner Kleinwort. Citigroup is arranging debt for the acquisition.

(www.emimusicpub.com; www.terrafirma.com)