Warner Music rules out new EMI bid

New York -- Warner Music Group Corp. said Tuesday it would not mount a bid for British rival EMI Group PLC, clearing a path for a $4.9 billion private-equity takeover.

Warner executives decided they could not justify an offer of more than $6.15 a share -- an amount they believed would have been required to beat London's Terra Firma Capital Partners, which had bid $5.43 a share, The Financial Times reported.

An EMI spokeswoman had no comment.

EMI's board recommended in May its shareholders accept Terra Firma's offer. But some shareholders thought Warner would come forward with a more lucrative offer.

Terra Firma gave EMI until Thursday to accept its offer.

EMI includes London's EMI Music, which operates several record labels, and New York's EMI Music Publishing.

Warner might still buy EMI Music from Terra Firma a few months after the sale closes because Terra Firma might wish to retain only the publishing business, which is considered a better prospect than the recorded-music division, the newspaper said.

Warner and EMI have discussed a merger for several years to reduce cuts and increase profitability as revenues and profits in recorded music decline.

Copyright 2007 by United Press International.