If rumors could seal deals, then EMI would have been acquired by Warner Music Group by now.  The latest flame-fanning comes from the London-based Times, which is now pointing to a potential break-up bid by WMG and private equity firm KKR. 

In the tandem scenario outlined, KKR would acquire the more stable publishing arm, while Warner would acquire the recording division.  Both deals could benefit from a seriously-distressed Terra Firma, a firm struggling to complete covenants and reportedly considering a chop-and-sell.

In terms of valuations, the Times pegged EMI Music Publishing at 1.2 billion pounds ($1.82 billion), but stopped short of assigning a price to EMI Music. 

Complicating matters is a legal stand-off between Terra Firma and lender Citigroup, one that could cool M&A interest until resolved.  Indeed, something always seems to complicate a merger between Warner Music Group and EMI.  For years, the labels have been eyeing takeovers of one another, a recurring dance that never seems to reach a resolution.