EMI faces carve-up of music and publishing as Citigroup seeks buyers

MUSIC group EMI could be split in half to tempt buyers as American investment bank Citigroup looks to dispose of the giant record business.

Warner Music, the US firm that was taken over earlier this year for $3.3 billion (£2.1bn) by billionaire Len Blavatnik, is tipped as the favourite to acquire EMI’s recorded music arm. Universal, owned by Vivendi of France, is also in the running.

Germany’s BMG, run by media group Bertelsmann and giant American private equity firm Kohlberg Kravis Roberts, looks like the frontrunner to take EMI’s publishing business.

Citigroup seized control of EMI – which is home to a broad range of singers including Norah Jones, Lily Allen, KT Tunstall and Joss Stone – in February and wrote off £2.2bn of the label’s borrowings to take its debt pile down to £1.2bn.

The lender had bankrolled corporate financier Guy Hands’s £4.2bn acquisition of EMI in 2007 through his Terra Firma private equity firm, but took control the company when Hands could no longer service its debts.

The sale of EMI appeared to have been shelved earlier this month after a number of private equity firms reportedly pulled out of the running.