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EMI chief Nicoli is ousted

New owner Terra Firma installs its managing director Chris Roling to run the music label.

August 30, 2007|From the Associated Press

LONDON — Private equity fund Terra Firma Capital Partners Ltd. stamped its authority on EMI Group, announcing Wednesday the departure of EMI Chief Executive Eric Nicoli and outlining a new focus for the music label of the Beatles, Coldplay and the Rolling Stones.

Terra Firma, which paid $4.9 billion for EMI, said Nicoli and Chief Financial Officer Martin Stewart would be out before the takeover's completion and the company's delisting from the London Stock Exchange next month.

They will be replaced by Terra Firma managing director Chris Roling, who will in effect become CEO and CFO. Roling will report directly to Terra Firma's boss, Guy Hands, who will be the chairman of a newly created supervisory board.

Nicoli, who joined EMI in 1999, has been the target of shareholders frustrated at the company's poor performance in recent years.

EMI Group has struggled more than its contemporaries amid declining physical CD sales, blaming disappointing North American results for a series of damaging profit warnings. But analysts say the overall industry's woes do not entirely explain EMI's performance, pointing out that Warner and Universal have fared better under the same conditions.

Industry experts instead point to EMI's internal control problems and lack of new music.

Nicoli was criticized for failing to complete a buyout that would have ranked EMI, whose artist roster also includes Kylie Minogue and Joss Stone, alongside a joint venture between Vivendi's Universal Music Group and Sony BMG Music Entertainment.

This year it had seemed the takeover talks with Warner Music Group Corp., which had dragged on for years, would finally come to fruition.

However, Warner's last, $4.2-billion approach was rejected in March, and it declined to get into a bidding contest with Terra Firma.

There has been speculation that the private equity group will sell EMI's struggling recorded music business to focus on music publishing.

Hands said Wednesday that the "initial focus will be to maximize the value of the significant assets in EMI's publishing business and to realize the digital opportunity in recorded music."

"We will invest in the business to ensure that it grows both organically and by acquisition," he added.

EMI's music publishing division ranks No. 2 in the world, behind Universal's. Unlike EMI's recorded music business, it has done well in the United States, where it owns the Motown catalog.

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