NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, OR INTO,
AUSTRALIA, CANADA OR JAPAN
EMI GROUP plc
Following this morning's press speculation, EMI Group plc (EMI) is providing
the following update to the market:
* Since EMI's approach, announced on 3 May 2006, to acquire Warner Music
Group Corp. (Warner Music), EMI has been continuing actively to explore the
potential acquisition of Warner Music, including in discussions with Warner
Music and certain of its shareholders.
* On 14 June 2006, EMI received an initial unsolicited alternative proposal
from Warner Music to acquire all of the share capital of EMI for 315 pence
per share in cash. The Board of EMI considered this proposal from Warner
Music to be wholly unacceptable and unanimously rejected it.
* Thereafter, on 23 June 2006, EMI made a revised proposal to Warner Music
for EMI to acquire all of the outstanding shares of Warner Music for $31
per share in cash. EMI envisages that the proposal would be funded by debt
finance and a rights issue, both of which would be fully underwritten, and
the disposal of certain music publishing assets. The proposal is
pre-conditional on a number of matters, including due diligence. The Board
of EMI believes an offer at this level is fully supported by synergy
benefits available from the combination and that a transaction at this
offer level would therefore deliver compelling value and earnings accretion
to EMI's shareholders.
* Subsequently, on the evening of 27 June 2006, Warner Music informed EMI of
its rejection of EMI's revised proposal, and submitted to EMI a revised
pre-conditional alternative proposal to acquire EMI at 320 pence per share,
in cash. The Warner Music revised alternative proposal is non-binding and
is pre-conditional, inter alia, on due diligence and a unanimous
recommendation of the Board of EMI.
* The Board of EMI has unanimously rejected the revised alternative proposal
from Warner Music at 320 pence per share, and considers it to be wholly
unacceptable, having regard to EMI's prospects, the potential synergy
benefits of a combination of the two companies and the range of strategic
options available to EMI.
The Board of EMI continues to believe that an acquisition of Warner Music by
EMI at $31 per share in cash would be very attractive to both sets of
shareholders and would deliver value to EMI's shareholders which is far
superior to Warner Music's revised alternative proposal. The Board of EMI is
committed to pursuing such a transaction only if it delivers enhanced value and
earnings accretion to EMI shareholders.
EMI will make further announcements as appropriate.
The Directors of EMI accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the Directors
(who have taken all reasonable care to ensure that such is the case), the
information contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such information.
Warner Music has not approved the making of this announcement. There can be no
certainty that an offer for EMI by Warner Music will be made or as to the terms
on which any offer might be made.
Further information on the Warner Music Group Corporation can be found at
www.wmg.com and on http://www.sec.gov/edgar/searchedgar/webusers.htm.
EMI Group plc
Amanda Conroy Corporate Communications +44 20 7795 7529
Susie Bell Investor Relations +44 20 7795 7971
Sonia Shah Investor Relations +44 20 7795 7625
Brunswick Group LLP
Patrick Handley +44 20 7404 5959
Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the
Code), if any person is, or becomes, "interested" (directly or indirectly) in 1
per cent. or more of any class of "relevant securities" of EMI, all "dealings "
in any "relevant securities" of EMI (including by means of an option in respect
of, or a derivative referenced to, any such "relevant securities") must be
publicly disclosed by no later than 3.30p.m. (London time) on the London
business day following the date of the relevant transaction. This requirement
will continue until the date on which any offer becomes, or is declared,
unconditional as to acceptances, lapses or is otherwise withdrawn or on which
the "offer period" otherwise ends. If two or more persons act together pursuant
to an agreement or understanding, whether formal or informal, to acquire an
"interest" in "relevant securities" of EMI, they will be deemed to be a single
person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of EMI by Warner Music or EMI, or by any of their respective
"associates ", must be disclosed by no later than 12.00 noon (London time) on
the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities
in issue, can be found on the Takeover Panel's website at
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on
the Takeover Panel's website. If you are in any doubt as to whether or not you
are required to disclose a "dealing" under Rule 8, you should consult the
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