EMI has come out and made it clear: It had been rebuffed after making a $4.2 billion cash-and-shares offer for Warner Music Group. Warner Music said its board “has determined that the proposal is not in the best interests of our shareholders and has unanimously rejected it”.
EMI is still hoping: “The board of EMI continues to believe that an acquisition of Warner Music by EMI would be very attractive to both sets of shareholders.”
Staci adds: EMI’s offer of $28.50 a share offered scant premium over WMG’s range; Warner closed at $27.29 a share Tuesday and is now trading at $28. Would WMG accept a bid at what is believed to be its target of $30? Is EMI willing to try again? Can it afford to/not to? Whatever the next few days brings, I don’t think we’ve heard the last of this. More at MarketWatch.
Update: (via DealBook) The companies’ statement did nothing to quell talk of a merger, at least not in the press. The FT, which broke the story that a merger againwas being discussed, is still calling it “almost inevitable” but does include comments from those not sure it’s a great idea. Meanwhile, from the inbox, Merrill Lynch analyst Jessica Reif Cohen’s latest note on the subject: “Based on our model, EMI’s bid gives approximately 65% of the value of synergies to WMG shareholders, suggesting limited scope for higher future bids.”
Related: Analyst: EMI, WMG Combo Likely Would Be Merger Of Equals รข
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