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EMI gets buyout bid
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April 30, 1998: 4:58 p.m. ET
Record company approached by suitor; stock jumps, but no final offer yet
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NEW YORK (CNN) - Shares of EMI Group PLC, the British record company that made the Spice Girls a household name, hit a high note Thursday after the company confirmed it has been approached by a possible buyer.
EMI's stock price climbed to a high of 600 pence ($10) per share on the announcement, before inching back down to 578, up 67 pence, or just over 13 percent.
The company warned, however, that investors should view the preliminary discussions with caution.
"EMI has been subject to such speculation since before its demerger, and shareholders should not assume that this approach will result in an offer being made for the company," EMI said.
EMI has a stable of music groups including the Beatles, Spice Girls, The Rolling Stones, Garth Brooks and Janet Jackson.
Although EMI wouldn't release the name of the possible suitor, industry insiders say Canadian beverage and entertainment conglomerate Seagram Co. Ltd. is a likely candidate.
"Seagram is a big company and has a very mature and profitable beverage business and generates tremendous amounts of cash, so Seagram can handle the debt," said CIBC Oppenheimer analyst Roy Burry, adding that EMI would be an attractive addition for the company.
"Music is the area where the Universal subsidiary has done the best and they want to expand their markets and move into European markets."
Paribas analyst Nigel Reed added EMI is ripe for the picking.
"It has an excellent stable [of musical artists]," he said. "It's got a very good back catalog, which is steady sellers, as well as the ability to bring new acts on stream and market them around the world, as we have seen with the Spice Girls."
EMI, which split from Thorn PLC almost two years ago, has been viewed as the target of a number of possible suitors in recent months, including most recently Canada's Seagram Co. Ltd. (VO).
Earlier, EMI denied a report in the Financial Times that U.S. takeover specialist Kirk Kerkorian was interested in making a bid for the company.
At a price of 578 pence per share, EMI is valued at about 4.54 billion pounds ($7.6 billion). 
-- from staff and wire reports
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