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"Now that it is clear that, in the current regulatory environment, a merger with another major music company cannot be pursued at acceptable cost and risk, we will proceed as an independent, music-focused group."
——statement from EMI
EMI PUTS ON A HAPPY FACE
Spurned Conglom Puts Positive Spin On Earnings; Can’t Shake Failed Mergers, Though
With two failed attempts at marriage behind it, the spin out of EMI this week is that it may be single, but it’s still quite attractive.

The industry’s last "stand-alone" music group said Tuesday (5/22) it was now likely to remain alone, especially since its business has seen an upturn.

The company told the Financial Times of London its global music marketshare had increased from 12.5% to 14.1% over the past few months. How ’bout those Beatles, folks!

Unless you’ve been in a coma, you know that EMI has seen proposed mergers with Bertelsmann and Warner Music Group fail, due in part to the European Commission’s regulatory concerns. Those concerns have virtually removed the possibility of a union with another music group. Insiders say suitors from outside the music sector have kicked the tires but were deterred by the huge price tag.

"Now that it is clear that, in the current regulatory environment, a merger with another major music company cannot be pursued at acceptable cost and risk, we will proceed as an independent, music-focused group," EMI said in a statement accompanying its earnings report for fiscal 2000.

In an effort to restore confidence about its prospects, EMI Chairman Eric Nicoli claimed the company was "well placed to make further progress in the current financial year."

For the year ended March 31, EMI posted a 5.7% increase in pre-tax profits before exceptional items and amortization to $373.6 million, on revenues that jumped 12% to just shy of $4 billion.

The company booked a previously announced $61 million charge relating to the failed talks with WMG, and combined with a $35.9 million increase in interest and exchange rate charges and a $28.8 million rise in amortization costs, net earnings sank 48%, to $122.8 million.

"These pleasing results achieved in the context of a weak worldwide music market and in spite of the potential distraction of our merger discussions, demonstrate the fundamental strength and quality of EMI's businesses," Nicoli spun hopefully.

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