Oooh look it is a corporate war
Thursday, June 29, 2006
So last night Music Towers reported on EMI trying to buy Warner Music, and while we slept (erm were in the pub). Warner issued an attempt to buy EMI.
Look at that! That is fun, I wonder who will have the last laugh.
The Lawyers!
Here is the nitty gritty.
NEW YORK, June 28, 2006-Warner Music Group Corp. (NYSE: WMG) today confirmed that the EMI Group plc (EMI) board of directors had declined WMG's June 27 proposal for the acquisition of 100% of EMI's outstanding shares of common stock for 320 pence per share entirely in cash.
The WMG proposal was made after the WMG board had unanimously rejected EMI's revised proposal to acquire WMG at $31 per share in cash, determining that it was not in the best interests of WMG's shareholders. The WMG board had carefully reviewed EMI's revised proposal with WMG's outside legal and financial advisors.
The WMG board agrees with EMI that there are potential merits in combining the businesses of WMG and EMI, but believes that a WMG acquisition of EMI will provide shareholders of both companies with a superior opportunity to realize significant value in their shareholdings.
The EMI proposal also includes several important pre-conditions which increase execution risk. These include, in particular, the pre-sale of Warner/Chappell Music and underwriting a substantial rights offering. The WMG and EMI proposals each also include certain other pre-conditions and conditions, including regulatory approvals and due diligence. However, the WMG proposal to EMI is not subject to a pre-condition requiring the pre-sale of EMI's music publishing business, nor would it carry an equity financing condition. This series of proposals was initiated by EMI's unsolicited May 1 proposal to acquire WMG for $28.50 per share, comprised of $20 in cash and $8.50 in stock. The WMG board unanimously rejected that proposal on May 2, determining that it was not in the best interests of WMG's shareholders.
On June 14, WMG made a proposal to purchase EMI for 315 pence per share in cash. EMI rejected that proposal on June 23, when it made its revised proposal to acquire WMG for $31 per share in cash. The WMG proposal has been made with the unanimous support of its board of directors, which includes representatives from its four largest shareholders, and the Company continues to believe that its recent proposal is value enhancing to EMI shareholders. The Company intends to update the market, as appropriate.