Not Sold Separately! EMI Also Insisting On a Bundled Sale

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It looks like these parts ain’t sold separately, at least for now.

After Warner Music Group insisted on selling itself whole last week, sources connected to EMI owner Citigroup are pointing to a similar strategy. That means anyone planning to cherry-pick some publishing plums can go home, unless they also purchase the recording side.  “The Warner bidding process is giving [Citigroup] some confidence that they can also sell this thing whole,” one source close to the discussions told Digital Music News.

Which of course makes lots of sense – after all, selling some troubled recording assets on their own doesn’t sound easy.  But a lot depends on how the Warner process works out.  Yucaipa Companies is rumored to be bidding $3 billion for the whole enchilada, not bad for a fire-sale and a development that may be encouraging sellers at Citigroup.  Additionally, a pair of other potential WMG buyers also appear interested in the recording and publishing package, a situation that could recur around EMI.  “It all depends on what kind of offers [EMI] gets,” the source continued.  “But Citi needs to dump this thing, so if push comes to shove, they’ll short-sale the parts if needed.”

The information is supported by an earlier New York Post report, which pointed to EMI chief Roger Faxon as a strong proponent of a packaged play.  But another source questioned whether the bank is really seeing “eye to eye” with Faxon.  “The instructions are, ‘dump it,'” another source stated, which fits the general strategy of banks in situations like these.

Citigroup has yet to officially put EMI on the market, though like WMG, a circle of potential suitors awaits.  Stay tuned.