Crunch time for EMI in Warner war

THE moment of truth is looming for EMI in the bid battle over Warner Music. Eric Nicoli, chief executive of the UK music giant, had a tense weekend of waiting on the sidelines, wondering whether EMI will once again be left in the cold. Earlier merger talks with Germany's Bertelsmann also came to nothing.

Time Warner last week said it favours a rival bid led by entertainment mogul Edgar Bronfman Jr. The US group has given Bronfman a tight deadline to firm up his £1.5bn cash bid.

Crucial talks in the States between TW and the Bronfman consortium, backed by billionaire financier Haim Saban, were expected to continue into the small hours of this morning. Sources familiar with the situation said discussions were 'ongoing'.

A failure by EMI to win Warner will leave it a wallflower in the music industry's rush to merge.

The UK group has offered £950m for Warner's recorded music division. The deal would comprise around £600m in cash, with Warner being given a 20%-25% stake in the enlarged company.

It could also sell Warner Chappell, its music publishing arm valued at around £700m, in a separate deal. Supporters of EMI say its offer is firm and fully financed.

Bronfman's £1.5bn cash bid is for the whole of Warner Music, including Warner Chappell.

It moved into pole position largely because of fears that EMI's bid would face scrutiny from competition authorities on both sides of the Atlantic.

'The Bronfman camp must show Warner their money,' said a source close to the deal.

EMI is thought unlikely to raise its bid and insists it can survive without the merger. The group has itself been approached by a number of venture capitalists, including US outfit Blackstone.