KKR and Warner Consider EMI Breakup Bid

LONDON (Reuters) – Private equity firm KKR and Warner Music Group (WMG.N) are in talks to launch a break-up bid for Warner’s indebted British rival EMI, the Sunday Times newspaper said.

The paper said KKR is interested in acquiring the music publishing arm of EMI, which it says bankers value at around 1.2 billion pounds ($1.8 billion), while Warner Music wants EMI’s recorded music division, which it says is more difficult to value.

EMI is owned by private equity group Terra Firma Capital Partners Ltd but is in dispute with its lender Citigroup (C.N), which could end up taking it over, the paper said.

The report said KKR and Warner would be unlikely to make a move for EMI until the stand-off between the company and its lender had been resolved.

KKR, Warner Music and EMI were not immediately available for comment when contacted by Reuters. ($1=.6592 pounds) (Reporting by Sarah Young; Editing by Greg Mahlich)