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Warner Music, EMI End Bids

July 28, 2006|From Bloomberg News

EMI Group on Thursday abandoned a third effort to buy Warner Music Group and form the world's second-biggest music company after a European Union court decision dimmed the prospects for regulatory approval.

"EMI has decided not to pursue a combination with Warner Music for the time being," the London-based company said.

Warner Music, which is based in New York, said in a later statement that it was retreating from its counteroffers for EMI.

"Warner Music does not believe that it would be prudent to pursue a combination" until "matters become clearer," the company said.

EMI and Warner Music each offered about $4.6 billion for the other. EMI Chairman Eric Nicoli has been trying since 2000 to buy Warner. The combined company would have a quarter of the market, moving ahead of Sony BMG to rank behind Vivendi's Universal Music Group, the industry leader.

But this month, the European Court of First Instance in Luxembourg threw out EU regulators' approval of the merger that created Sony BMG in 2004, saying they had carried out only "an extremely cursory examination" of the effects of the deal.

Warner Music shares fell 97 cents, or 3.9%, to $24.24.

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