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DOES KRAUT COME WITH THAT EMI?
As Middelhoff Eyes EMI, Nicoli's Biscuits Rise
When Bertelsmann boss Thomas Middelhoff talks, people listen. When Middelhoff acts, people buy.

Fueled by the renewed possibility that Bertelsmann AG would make a play for EMI Group Plc, shares of EMI stock took a healthy jump Thursday (11/9) on the London exchange. By the close of trading, shares in the company had increased 32 pence, or 6.25%, to 544 pence in heavy trading. The major reason for the stock's ascent was the completion of the sale of an 8.5 million-share block, which was scooped up by newly eager investors. Shares in the block, known as an "overhang" in the financial sector (hey, we learned something today), went for 523 pence per share, putting the total value at just over $63 million.

While there was no hard news to spur Thursday's action, last week's surprise announcement that Bertie would hook up with Napster brought a resurgence of rumors that the German conglom would then make a play for EMI, the last major music entity still up for grabs. Bertie needs content; EMI has nothing but content and is in need of a buyer—so the move seems not just obvious, but inevitable, considering Bertie boss Middelhoff's acquisitiveness and his stated vow to make his company #1 in the worldwide music biz.

Further fueling interest in the stock was a story Thursday in the Financial Times reporting that Bertelsmann had already checked with the European Commission about potential antitrust issues that might cause the EC to block such a merger, as it was prepared to do with the proposed Warner Music Group-EMI merger before the companies called it off.

Under the terms of their exclusivity agreement with WMG, EMI can't solicit any other offers until the end of January. That does not mean, however, that EMI head Eric Nicoli can't take a call from Middelhoff. According to Bertie, that call has not been made—yet.

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