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EMI agrees to buyout for $4.7b

Private-equity firm may face bidding war

LONDON -- Guy Hands's Terra Firma Capital Partners Ltd. agreed to buy EMI Group PLC for $4.7 billion, a transaction that analysts said raised the prospect of a takeover battle for the rec ord label of the Beatles and Coldplay.

EMI investors will get $110.41 a share London-based Terra Firma, a buyout firm, said yesterday. Shares of London-based EMI rose, indicating investors expect another bid for the world's third-largest music company.

"The company is totally in play," Claire Enders, founder of independent media research firm Enders Analysis, said yesterday. "They are hoping a bidding war erupts."

Warner Music Group, whose $4.1 billion offer was rejected in March, may raise its bid for EMI and buyout firms including One Equity Partners LLC are also interested, the Sunday Times said Sunday. EMI, which ended talks with Permira Advisers LLP in December, yesterday reported a $568.8 million loss and a 13 percent revenue drop as music downloads failed to make up for piracy and falling CD sales.

Music companies saw US album sales fall 17 percent in the first quarter. Retailers sold 117.1 million albums in the three months ended April 1, researcher Nielsen SoundScan said last month.

"EMI is suffering from what all the majors have suffered from, the decline in physical sales of CDs," said Theresa Wise, a media analyst at Accenture in London. "They have invested in digital music sales, but those aren't climbing as fast as traditional sales are falling," she said.

A spokesman for Warner Music, said the company had no comment on the EMI bid.

Both Hands and his spokesman declined to comment yesterday.

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