Private equity group Terra Firma said Wednesday it had won control of British music publisher EMI, which is home to The Beatles and Coldplay, after clinching 90 percent of its shares.
Terra Firma's bid valued EMI at 3.2 billion pounds (4.8 billion euros, 6.5 billion dollars) including debt, and followed a lengthy take-over tussle with US music group Warner Music. The private equity firm, which is headed by chief executive Guy Hands, said Wednesday it had secured 90.27 percent of the shares in EMI, which is the world's third-biggest music company.
Under British rules, a take-over is declared unconditional once 90 percent support is won, meaning that minority shareholders can be forced to sell their stakes. "The offer is now unconditional as to acceptances," Terra Firma said on Wednesday. The take-over offer, which was pitched at 265 pence per share, was backed by management at EMI, whose roster also includes The Rolling Stones, The Spice Girls, David Bowie, Janet Jackson, Robbie Williams and Norah Jones.
Terra Firma's tilt at EMI won a massive boost earlier this month after Warner Music Group decided not to make an offer. Prior to Warner's withdrawal from the race, Terra had struggled to win a significant amount of EMI shares, as investors eyed a bidding war.
Earlier this week, Britain's Take-over Panel granted the private equity house extra time to garner enough support, extending its take-over deadline until Wednesday. On Monday, however, Terra said its bid would lapse if it failed to win support from 90 percent of EMI's shareholders. Banks usually waive the stipulation once acceptances get near this level.
But Sunday's Observer newspaper reported that US bank Citigroup Terra Firma's financial backer had declined to give the buyout firm any assurance that the 90-percent clause would be waived amid turmoil on global stock markets.
Analysts are concerned that the troubled US housing market will hurt banks and finance companies enough to curb the availability of credit on which the economy thrives. In turn, that could affect private equity groups, such as Terra Firma, because their take-over bids are often financed by large amounts of bank debt. Management at EMI and Terra agreed to the terms of a recommended cash offer in May.
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