Hands set to take EMI

Guy Hands’ company Terra Firma has nearly reached the necessary shareholder acceptance rate in its bid for EMI, as reports in the Chinese media suggest the buyout firm may sell the business on to Chinese mobile company China Mobile Corporation.

UK buyout firm Terra Firma is set to buy music group EMI, as it extended its deadline for 90 percent shareholder acceptance to this Wednesday at 1pm.

84.96 percent of shareholders have accepted the buyout firm’s £2.4 billion ($4.9 billion, €3.6 billion) bid, Terra Firma said in a statement. The offer deadline has been changed from yesterday with the consent of the Takeover Panel and the board of EMI, the buyout firm said.

It had been thought Terra Firma would seek a waiver by underwriting US bank Citi of the 90 percent acceptance rate. The extension means it will probably not need to request permission from Citi. Banks would normally waive the acceptance rate in such situations, However, recent problems in the debt markets have left many banks reluctant to take on more debt.

A source close to Terra Firma said: “Citi have made huge amounts of money from Terra Firma and EMI over the years. They always waived the shareholder acceptance rate in the past.”

Problems in the worldwide recorded music industry since buyout firms first expressed an interest in EMI in March have left city sources questioning the rationale for buying EMI at the price Guy Hands’ company is paying. However, someone close to Terra Firma said: “People forget recorded music is only half the business, EMI also has a publishing arm which is very attractive to Terra Firma.”  

Chinese mobile company China Mobile Corporation is reportedly acquiring EMI through Terra Firma, according to the National Business Daily. 

China Mobile also intends to buy another unnamed music company, according to the Chinese newspaper.

But Terra Firma’s spokesman said: “The report is bizarre and wrong”. Forbes, the US business magazine, also reported China Mobile had denied an interest.