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Terra Firma seals takeover of EMI
(Belfast Telegraph Via Thomson Dialog NewsEdge) The investor okay came after a frenetic final push by Terra Firma and its bankers at Dresdner Kleinwort to achieve the minimum threshold set out by Citi, which has agreed to finance most of the purchase price. By last Friday, investors holding 85 per cent of EMI's stock had tendered their shares. The buyout firm requested a last-minute extension to the offer period on Monday, which the Takeover Panel granted. It expired at 1pm yesterday. The final tally of investors who agreed to the offer came to 91 per cent.
Under British takeover rules, Terra Firma can now force the target's remaining investors to accede to its offer. The firm expects to close the deal within the next month or so.
EMI is home to artists such as Coldplay, the Red Hot Chili Peppers and Madonna. Most investors had been holding out in the hope that Warner Music, EMI's on-again off-again suitor in recent years, would swoop in with a better offer. It wasn't until late last month that Warner said it would not bid.
Terra Firma and EMI announced the offer in May. Often banks will waive the 90 per cent threshold if acceptances get to within a couple of percentage points. Citi is understood to have refused to budge. Since the May takeover announcement, credit conditions have worsened markedly, meaning that Citi could have a hard time selling the debt package on to institutions.
Citi could have walked away from the deal had Terra Firma failed to get the support laid out in the financing agreement, though this was seen as highly unlikely. Such a move could have poisoned the bank's relationship with the private equity firm. The buyout industry is a favourite client-base for investment banks because their constant dealmaking means a steady flow of advising fees.
Copyright 2007 Independent News & Media Ltd Source: The Financial Times Limited
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