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"Time Warner has tonight informed us that they are now considering a possible proposal from another party as an alternative to our own firm offer."
——Eric Nicoli, EMI Chairman

EDGAR CRASHES
THE MERGER PARTY

Edgar Bronfman Jr.’s $2.8 Billion Bid for Warner Music Group Goes On the Fast Track
A funny thing happened on the way to EMI’s bid to acquire Warner Music Group from Time Warner.

Edgar Bronfman Jr.

The former Seagram/Universal Chairman is having the last laugh.

His consortium’s bid for Warner Music Group and Warner/Chappell Music Publishing is now on the fast track for approval.

The offer, valued at $2.8 billion, $2.5 billion in cash, with Time Warner maintaining approximately 11% equity ($300 million worth).

The Time Warner Board, currently still meeting, is expected to put the bid on the fast track, clearing the path for a quick approval.

Meanwhile, EMI Chairman Eric Nicoli seemed to acknowledge the increasing viability of the Bronfman bid, issuing the following statement: "On 19 November, we said that our discussions with Time Warner Inc. concerning the acquisition of the recorded music division of the Warner Music Group were progressing well and at an advanced stage. Time Warner has tonight informed us that they are now considering a possible proposal from another party as an alternative to our own firm offer. Following a rigorous assessment of the business and the opportunity to create value, we have put forward a full and fair offer with the interests of our shareholders uppermost in our minds. When we reach a definitive conclusion, we will make a further announcement."

Bronfman’s group includes TV mogul Haim Saban and Thomas H. Lee Partners, with several other big-time players rumored to be in the mix, as well.

Inside sources insist EMI is still in the running, and that, given the short window Bronfman is getting to produce the financing for his bid, the ball could end up back in its court. At the same time, the company reportedly does not want to "overbid" for the Music Group.

The question now is, what will Bronfman’s strategy be to return the Warner Music Group to profitability? Insiders are predicting consolidation will be the first order of the day in any case.

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