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The now-likely outcome of the auction is a surprise on many levels.
EMI SALE NEARLY A DONE DEAL?
A Pair of Respected Newspapers, One on Each Side of ther Pond, Has Called the Two Winners. And They Are…
Make note of today’s date: 11/11/11. Will it be remembered as the date EMI was split in two, its halves going to a pair of late-charging bidders, while the Big Four became the Big Three?

Barring a last-minute hitch, the Wall Street Journal reported early Friday morning, EMI's recorded-music unit will be sold to Universal Music Group for $1.9 billion—increasing its bid by $700 million to meet Citigroup’s price tag—while a group spearheaded by Sony/ATV will buy the publishing operation for $2.2 billion. The deal, valued at $4.1 billion in total, could be announced later Friday, but the bank may wait until the weekend, according to the source, a person familiar with the matter.

Our own sources insist that this deal is not done yet, and that it's possible that UMG will walk yet again. But whatever differences remain between the two parties could be worked out by later today.

The winners, if things go as the WSJ’s source anticipates, will be UMG ruler Lucian Grainge, in what would stand as the defining move of his impressive career, Sony/ATV chief Marty Bandier, who would regain control of the pubco he built into the industry’s leading operation, and Citi, which would have gotten out of this mess with a big wad of cash. Citi had been asking $4 billion for the businesses in total, most analysts thought it would likely have to settle for less, given the challenged state of the credit markets and the music industry itself.

But according to a similar story in the Guardian, Citi made one concession, retaining in deficit EMI's pension fund, which has 21.5k members, though said deficit tuirns out to be far less than the $640 million cited in previous reports.

The now-likely outcome of the auction, note reporters Dana Cimilluca and Max Colchester, is a surprise on many levels. Neither Universal nor Sony had been tipped as likely winners in the months of frenzied speculation since Citi put EMI up for sale in June. Instead BMG Rights Management was long reported to be the frontrunner for EMI Music Publishing, while Warner Music Group was expected to consolidate records.

There’s still a chance that one of the rivals could come back with a knockout offer before the deals are announced, but the odds of that now appear slim, according to the WSJ. Still, agreements with the two parties will need to get over regulatory hurdles that could be particularly formidable on the recorded side. Indeed, with these added assets bringing UMG’s marketshare near 40% in the U.S. Consequently, Universal expects to have to sell as much as €500 million of assets to win approval for the deal, which could take 10 to 20 months, according to people familiar with the matter.
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