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Warner Music mulls new offer to buy EMI

NEW YORK -- Warner Music Group is "actively" considering making a new offer to buy rival EMI Group, which accepted a buyout bid for $4.8 billion from Terra Firma Capital Partners last month.

An offer would be conditioned on "appropriate antitrust clearances being obtained," New York-based Warner Music, the recording company of Madonna and Metallica, said yesterday in a statement. Additional details weren't provided.

EMI, the world's third-largest music company, last month agreed to be acquired by Guy Hands's Terra Firma, a buyout firm, after rejecting Warner's $4.1 billion takeover bid in March. EMI and Warner, facing declining music sales , have bid to buy each other at least four times since 2000.

"It would give them a better position to compete with the other big guys and fill out their roster" should the two companies combine, Jamie Rizzo, a bond analyst with Fitch Ratings in New York, said in an interview.

"There are some covenants in place that might make it difficult to do a large debt acquisition without concessions from lenders," Rizzo said.

EMI and Warner each abandoned attempts to buy the other last July on the concern that a merger might not win approval from antitrust authorities in Europe. European regulators are now reassessing the 2004 merger that created Sony BMG Music Entertainment, the world's second-largest record company after Vivendi SA's Universal Music Group.

In accepting Terra Firma's bid, EMI said it wouldn't have the "regulatory uncertainty" a Warner offer would face.

When it made its last bid for EMI, Warner said it had obtained the support of Impala, an association of independent labels in Europe that had lobbied against the Sony BMG merger.

Amanda Conroy, a spokeswoman for EMI, declined to comment.

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