Sony Might Acquire a Majority Stake in EMI Music

Sony Might Acquire a Majority Stake in EMI Music
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Sony held preliminary talks to acquire a majority stake in EMI Music Publishing, according to Bloomberg, citing people with knowledge of the matter.

Mubadala Investment has begun reaching out to potential suitors for the catalog of more than 2.1 million songs, said the people, who asked not to be identified. The Abu Dhabi sovereign wealth fund has held talks with Sony and approached other possible buyers, including entertainment groups and potential financial bidders, the people said.

Adding EMI’s extensive catalog would solidify Sony’s position as the largest music publisher, as paid streaming services proliferate and valuations for music copyrights soar. The company already owns almost 40 percent of EMI, and operates the business.

Mubadala has signaled its intent to sell its majority holding and plans to exercise an option that would force Sony to acquire its stake or trigger a sale of the entire company. While that process can’t formally begin until the end of June, Mubadala is already reaching out to interested parties to gauge pricing.

Mubadala is seeking a valuation of at least $4 billion for EMI, the people said, almost double what the Sony-led group, which also includes billionaire David Geffen, paid for the business six years ago. A sale would be the largest music-industry transaction since the last time EMI changed hands.

If the parties fail to reach an agreement, Sony risks losing the catalog to one of its largest competitors. Billionaire Len Blavatnik, the owner of Warner Music Group, has expressed interest in EMI, two of the people said.