Warner renews bid for EMI

LONDON -- EMI Group PLC, beset by profit warnings and an accounting scandal in Brazil, was thrown a potential lifeline yesterday with a possible new takeover bid by a former suitor, Warner Music Group.

A tie-up would bring a badly needed infusion of top US artists, including Madonna and the Red Hot Chili Peppers, to London-based EMI, whose Beatles remix album dropped off Billboard's top 40 and whose big hope for cross-Atlantic appeal, Robbie Williams, has drawn more publicity for rehab than music.

EMI confirmed it had been approached by Warner, but has received no specific proposal.

"A deal would be a no-brainer," said Richard Hunter, of Hargreaves Lansdown Stockbrokers.

EMI, whose book includes Norah Jones, Coldplay, and Kylie Minogue, jumped more than 8 percent to $4.69 per share on the London Stock Exchange. Warner Music rose 90 cents to $19.15 in New York.

EMI and Warner discussed a $4.6 billion deal last year, but abandoned the effort when a European Court ruling scuttled a merger of the music units of Sony Corp. and Bertelsmann AG. Some analysts said New York-based Warner's overture suggests optimism the Europeans will clear the Sony-BMG deal.

Notably, Warner said its new overture is supported by Impala, a trade association. Impala's opposition to prior mergers has been seen as a key influence in the tough stance taken by European antitrust authorities.

Others remained doubtful. "The key issue within any corporate activity remains regulatory risk," said Iain Daly at Bridgewell Securities.

Analysts say that the overall industry's woes don't explain EMI's poor performance. They cite EMI's persistent weakness in the United States, lack of new tunes, and internal control problems.

Two recent profit warnings followed revelations last year of accounting fraud at EMI's Brazilian recorded music division. The fraud inflated profits.