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“It is most encouraging that, in these extremely challenging industry conditions, both of our businesses, recorded music and music publishing, maintained sales, operating profit and margin at last year’s level and outperformed the rest of the industry.”
——EMI Chairman Eric Nicoli

EDGAR SURGES, EMI DOES NUMBERS, BERTIE BOARD MEMBER QUITS

Post Gives Consortium Edge as Nicoli Cites Progress, Gutersloh Vet Leaves Over Sony Plan
The New York Post claims that Time Warner will shortly recommend private discussions with Edgar Bronfman, Jr.'s consortium of bidders for Warner Music Group.

The Bronfman-Haim Saban-Thomas H. Lee Partners group, which has been dogging longtime WMG suitor EMI's heels for some time, has reportedly taken the lead as a result of submitting a $2.55 billion cash offer and dangling a 20% retention of ownership before TW shareholders.

The Post report emphasized, however, that EMI is still very much in the game, though the company's stock took a dip as reports of gains by Bronfman's group hit the wires.

Meanwhile, deal or no deal, EMI Chairman Eric Nicoli exulted over his company’s latest numbers. For the six months ending 9/30, EMI was able to demonstrate advances in the U.S., where it has traditionally struggled. Moving up to 11% marketshare, EMI posted sales of around $1.29 billion.

“We consider our results evidence that we can perform whatever the market conditions, and are equipped to flourish in the future with our without a [merger] deal,” proclaimed Nicoli, who in actuality faces tremendous pressure to get the WMG deal on his third attempt.

“It is most encouraging that, in these extremely challenging industry conditions, both of our businesses, recorded music and music publishing, maintained sales, operating profit and margin at last year’s level and outperformed the rest of the industry.”

The merger plan recently announced by Sony and BMG also complicated EMI’s agenda for regulatory approval. But Sony-BMG has now apparently caused an internal rift.

Gerd Schulte-Hillen, a 34-year Bertelsmann exec, is resigning the conglom’s advisory board over differences with the company regarding its “strategic direction.” 

After expressing concerns about a deal with Sony for Bertie’s record group, Schulte-Hillen cast a vote against the plan, according to an L.A. Times report. Chairman Gunther Thielen then orchestrated his ouster. In a departure from traditional German power struggles, this did not require leaving Schulte-Hillen alone in a room with a revolver.

This followed Bertie and Sony’s joint filing of a preliminary merger application with the EU.

Bertelsmann's own latest numbers show a return to profitability following sizable losses for the same period in 2002.

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