EMI in dire straits

2010-04-01 15:01

Struggling music group EMI faces being taken over by its bankers

after failing to clinch a deal to sell the North American distribution rights

for its artists to Universal Music Group or Sony Music.

EMI, which has the Beatles, Coldplay, Lily Allen and Pink Floyd on

its books, had hoped to raise around $304?million by offering its rivals a

five-year licensing contract.

A source close to both sets of talks, who requested anonymity

because the discussions were private, said on Thursday that they fell apart

after a failure to agree on price.

That leaves EMI, owned by private equity group Terra Firma Capital

Partners, battling to raise the money by mid-June to meet its commitments on

loans from US bank Citigroup.

Terra Firma, led by British financier Guy Hands, bought EMI in 2007

for £4.2?billion. Hands is suing Citigroup regarding the deal in New York,

alleging that the bank falsely claimed there were other bidders, encouraging the

private equity firm to raise its own offer. Citigroup has denied the

allegations. EMI declined to comment on Thursday.

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