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Thorn to spin-off EMI
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August 16, 1996: 6:59 p.m. ET
Music division is likely to be a prime takeover target
From Correspondent Greg Clarkin
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NEW YORK (CNNfn) - It's home to artists as diverse as the Beatles and Garth Brooks -- and it could be up for grabs. Shareholders of the British conglomerate Thorn-EMI have voted to separate the EMI music division from Thorn's core electronics rental business.
The break up creates the world's largest independent record company, but analysts predict it will not remain independent for long.
"(Acquiring EMI) would allow someone to be a major player, being one of the big six music companies, so it's a unique property and it's one of a kind." said Stuart Rossmiller, an analyst at Deutsche Morgan Grenfell.
EMI's 10 percent share of the U.S. market ranks it fifth among the big six record companies. By comparison, industry leader Warner Music Group has a 22 percent share of the U.S. market.
But music industry veteran Robert Morgado says the real value of the EMI lies overseas. (176K WAV) or (176 AIFF)
Seventy percent of EMI's revenues come from its catalog and publishing business. It's the world's largest music publisher, possessing the rights to one million songs. It also owns the HMV music retail chain.
Music executives said the asking price for the company is in the $9 billion range. A number of companies, including Walt Disney and MCA have expressed interest.
The United States makes up one third of the $32 billion worldwide music business. But developing economies are creating new and fast growing music markets throughout the world, a trend which could result in EMI's value rising even higher.
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EMI Records
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