Less than 45 minutes before the end of private equity firm Terra Firma's deadline today, the company announced that it had acquired the required number of shares to buy London-based music giant EMI Group PLC (LSE: EMI). Meanwhile, EMI stock soared in trading this morning to over 263 pence per share after closing at 254 pence yesterday afternoon. Terra Firma offered 265 pence per share to shareholders in a deal backed by Citigroup Inc.'s (NYSE: C) Citibank division.
The offer by Terra Firma was first announced on May 21 and required 90% approval from shareholders before the deal would succeed. The first deadline was in late June and after three extensions the firm reported to the London Stock Exchange that it had acquired 90.27%, according to Billboard.biz. Reported numerous times, shareholders were allegedly waiting for an offer by rival music giant Warner Music Group (NYSE: WMG), but after an announcement two weeks ago, that was no longer an option.
The deal was lucky to receive approval from the European Commission, something a previous offer from WMG was not afforded in 2006 (it sat at 315 pence per share, fueling shareholder hopes). In the last four months, EMI has been at the forefront of music sales with the announcement of Digital Rights Management technology-free files for sale on Apple Inc.'s (NASDAQ: AAPL) iTunes Store and a future Amazon.com (NASDAQ: AMZN) store. The deal with Terra Firma is not expected to alter these developments.
