NEW YORK, NY. (By Will Tanous/ Warner
Music Group) - Warner
Music Group Corp. today confirmed that the EMI Group plc (EMI) board of directors had declined WMG's June 27 proposal for the acquisition of 100% of EMI's outstanding shares of common stock for 320 pence per share entirely in cash. The WMG proposal was made after the WMG board had unanimously rejected EMI's revised proposal to acquire WMG at $31 per share in cash, determining that it was not in the best interests of WMG's shareholders. The WMG board had carefully reviewed EMI's revised proposal with WMG's outside legal and financial advisors.
The WMG board agrees with EMI that there are potential merits in combining the businesses of WMG and EMI, but believes that a WMG acquisition of EMI will provide shareholders of both companies with a superior opportunity to realize significant value in their shareholdings.
The EMI proposal also includes several important pre-conditions which increase execution risk. These include, in particular, the pre-sale of Warner/Chappell Music and underwriting a substantial rights offering. The WMG and EMI proposals each also include certain other pre-conditions and conditions, including regulatory approvals and due diligence. However, the WMG proposal to EMI is not subject to a pre-condition requiring the pre-sale of EMI's music publishing business, nor would it carry an equity financing condition.
This series of proposals was initiated by EMI's unsolicited May 1 proposal to acquire WMG for $28.50 per share, comprised of $20 in cash and $8.50 in stock. The WMG board unanimously rejected that proposal on May 2, determining that it was not in the best interests of WMG's shareholders. On June 14, WMG made a proposal to purchase EMI for 315 pence per share in cash. EMI rejected that proposal on June 23, when it made its revised proposal to acquire WMG for $31 per share in cash.
The WMG proposal has been made with the unanimous support of its board of directors, which includes representatives from its four largest shareholders, and the Company continues to believe that its recent proposal is value enhancing to EMI shareholders. The Company intends to update the market, as appropriate.
About Warner Music Group
Warner Music Group (WMG) became the only stand-alone music company to be publicly traded in the United States in May 2005. With its broad roster of new stars and legendary artists, Warner Music Group is home to a collection of the best-known record labels in the music industry including Asylum, Atlantic, Bad Boy, Cordless, East West, Elektra, Lava, Maverick, Nonesuch, Reprise, Rhino, Rykodisc, Sire, Warner Bros. and Word. Warner Music International, a leading company in national and international repertoire operates through numerous international affiliates and licensees in more than 50 countries. Warner Music Group also includes Warner/Chappell Music, one of the world's leading music publishers.
This announcement does not amount to a firm intention to make an offer within the meaning of the U.K. Takeover Code. Accordingly, there can be no certainty that any offer will be made even if any or all pre-conditions are satisfied or waived. Any pre-condition to the proposal by WMG for EMI is waivable by WMG in whole or in part.
There can be no assurance that any offer will be made to EMI shareholders. This announcement does not constitute an offer or an invitation to purchase any securities in any jurisdiction.
The Directors of Warner Music Group Corp. accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
