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Warner Music Not Ready to Swallow EMI Whole

Warner Music (WMG) is reportedly still considering whether to acquire a piece of British music company EMI (EMIPY), but it appears likely that Warner has backed away from the idea of buying all of it. Warner is looking to jointly bid with a group of private equity firms that would snap up EMI’s music publishing division, while Warner would take the company’s recorded music business, according to the Daily Telegraph.

That type of break-up makes sense on a number of levels. First of all, Warner Music would have to pay at least GBP3 per share for EMI, in order to beat out a bid from private equity firm Terra Firma. At that price, Warner faces increasing risks, says Richard Greenfield of Pall Research, as reported in today’s Telegraph. It’s also doubtful, he points out, that Warner’s owners would agree to the GBP3 per share, or $5.5B, price tag for all of EMI.

The American company would save a great deal of money by only purchasing EMI’s recorded music business. In addition, that move would be more likely to gain European regulators’ approval than an attempt by the American company to buy all of EMI, reports Forbes. Alternatively, Warner may opt to purchase EMI’s recording business from Terra Firma. That move would allow Warner to skirt EMI’s board and management team, which may be reluctant to sell its business to a competitor.

Filed under: Products and services, Consumer experience, Starbucks (SBUX)

Following two secret shows in London and New York, Paul McCartney is planning to stage another impromptu show tonight in Los Angeles. Fans from across the nation have reportedly rushed to Los Angeles with hopes of seeing the former Beatle in concert, as rumors that McCartney will tour are quietly dismissed. McCartney has repeatedly admitted that any tour in support of his first album for Starbucks Corporation (NASDAQ: SBUX)'s music label Hear Music, Memory Almost Full, is postponed until his divorce from Heather Mills is final.

According to McCartney's spokesman, around 300 people will be the final tally of fans to see the show at Sunset Boulevard's Amoeba Music tonight. The same article does not quote the number of fans waiting to get a wristband for the show, but it does imply that hundred waited outside the record store. While a tour of grand scale would normally accompany a McCartney album, Memory Almost Full was released during a difficult time for McCartney. The album however, is a beacon of hope for McCartney in its musical and lyrical content and due to the success he has enjoyed after the album peaked at #3 in Billboard's album chart.

Starbucks staged a day long celebration of the album, repeatedly playing it all day when it was released on June 5th. The coffee-company secured McCartney from his 45-year relationship with EMI Group PLC (OTC EMI) in March and rumors are circulating that McCartney aims to secure a long-term deal with Hear Music because the success he has enjoyed with Starbucks.

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