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We know that if you step back and see where we are going, where the alliance of these two businesses through Global Rights Management is taking us, the greatest value is in keeping the business together.
—-Roger Faxon on the sale of EMI Music
FAXON'S LETTER TO THE TROOPS
EMI Gets the Bidding Process Underway, with Blavatnik, the Gores, UMG, Sony, BMG Circling
EMI Music boss Roger Faxon sent an interoffice memo to his troops this morning, indicating the bidding process for the company has officially begun.

Well we are off to the races. In about a half an hour, we will be announcing that we are beginning a strategic review process in earnest. We, along with Citi, intend to explore all possible alternatives, including a sale, recapitalization or IPO of EMI, all with the aim of setting the stage for the next chapter in EMI's ownership. That is not to say that Citi has not been a great owner... They have! They have been nothing but supportive of our strategy and our team. But from the moment of their acquisition of EMI in early February, we have made clear that their custodianship of this great company was always only going to be temporary.

Over the last few months, we have been preparing for the moment when we would formally begin this process. Many of you have worked very hard indeed during that time to gather all the information necessary, and while there is still some work to be done, we're now at a point where we can feel comfortable that we're ready to go forward in as ordered and well-prepared a fashion as possible.

So, how is this going to work? Normally there are three or four stages in processes like this. The first phase will involve engaging with and providing information about the company to potentially interested investors. After which, we will evaluate the investor interest and move into a more detailed diligence process. Simultaneously, we will be comparing and contrasting the various alternatives, including a sale, recapitalization or IPO. In the final phase, we will get into negotiating and executing on the desired alternative. If all goes according to plan, that should mean that by Q4, we will have a good idea of who our new owners are likely to be. I will, of course, fill you in along the way on our progress...

I know that some of you will welcome this news with some trepidation, but really you should not. EMI is a great business. It has an incredible heritage and an even more exciting future. We are optimistic about the music market, and have a clear vision for the future which builds on the strengths of both parts of our business. Working together over these last months has demonstrated that the Global Rights Management approach will deliver the growth we seek because it delivers better outcomes for our artists and songwriters.

There will be a lot of people kicking the tires trying to figure out whether slicing and dicing the company will yield a higher value. But, we know that if you step back and see where we are going, where the alliance of these two businesses through Global Rights Management is taking us, the greatest value is in keeping the business together. That is why I believe that EMI will continue to be EMI for a very long time to come.

So I welcome this next chapter in EMI's history. We will come through stronger and even more prepared to meet the challenges of the future, empowered to continue to build a new kind of music company that is focused on delivering for our artists and songwriters.

Best wishes, Roger

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