London : The long struggle for the takeover of British music giant EMI has ended with the announcement that the group has agreed to a 3.2 billion pound ($6.24 billion) bid by private equity firm Terra Firma.
The announcement, spelling further consolidation in the international music industry came Monday as EMI published annual results showing a 61 percent drop in underlying profit before tax to 62.7 million pounds and a 15 percent decline in music revenues.
The EMI Group, whose artists include Lily Alen, Norah Jones, Robbie Williams and The Beatles, had been the subject of bid speculation for the past year as its business struggled.
It previously rejected a takeover bid by US industry rival Warner Music. US private equity firms Cerberus, Fortress and One Equity were also said to have expressed an interest in bidding.
EMI, which made the sale announcement two days earlier than expected, has issued several profit warnings and seen sales decline dramatically in recent months, registering losses of 260 million pounds in the past year.
A statement said EMI's board of directors had recommended the 265 per share offer from Terra Firma, but the firm's shareholders must still approve the deal.
It values EMI shares at 2.4 billion pounds and including debt, the deal is worth 3.2 billion pounds.
EMI said it had received a number of different offers but that the Terra Firma bid was the most "attractive".
"Terra Firma's offer delivers cash now, without regulatory uncertainty and with the minimum of operational risk to the company," said chairman John Gildersleeve.
Terra Firma is run by Guy Hands, one of Britain's leading financiers.
Gildersleeve said the deal would enable EMI to "build on its current position as one of the world's leading music companies and accelerate the development of its digital and online strategy to fully exploit this long-term growth opportunity."
Previous attempts by Warner and EMI to merge had stumbled on regulatory issues.
Warner Music, which has Madonna and the Red Hot Chili Peppers in its books, made two approaches for EMI last summer, which were both thwarted by a European Court judgement casting doubt on whether regulators would allow further consolidation in the music industry.
A sale to private equity would avoid many of these hurdles, analysts said Monday.
Shares in EMI surged by more than 9 per cent on news of the takeover offer. EMI, one of the world's "big four" record companies, has suffered a downturn in its fortunes in the past 18 months.
Record sales have been hit by the trend for more digital downloading of music while a number of high-profile album releases have disappointed.
EMI is tackling the current crisis with a 110-million pound restructuring programme, including savings from the removal of layers of management.