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EMI Hedges on Bertelsmann Deal, Says Talks With Warner Continue

November 22, 2000|From Reuters

LONDON — EMI Group dampened hopes for a rebound deal with its latest suitor, Bertelsmann, warning Tuesday that merger talks could drag on for weeks and may falter.

EMI, whose original plan to merge with Warner Music was scotched by European regulators last month, said it was still talking to Warner about an alternative deal, with the outlook for a merger with Germany's Bertelsmann "far from clear."

EMI also reported a widely anticipated 30% drop in pretax profit, to $84.2 million, with the bulk of its big album releases set for the second half. Analysts had forecast pretax profit of $81.6 million.

Having taken a $60.9-million charge for lawyers and other fees related to the Warner talks, the bill looked set to mount in the second half as EMI Chairman Eric Nicoli said 11-day-old merger talks with Bertelsmann had not resolved basic issues such as price.

EMI's American depositary receipts on the New York Stock Exchange gained 39 cents Tuesday, to $16.89.

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