Warner boss to quit over EMI bid
WARNER Music chairman Roger Ames will resign if Britain's
EMI chairman Eric Nicoli is understood to have made an offer for Warner on Friday after merger talks between the Americans and BMG of Germany ran into difficulties.
Industry sources say Ames has told friends he will refuse to work for Alain Levy, EMI's head of recorded music, if the British bid succeeds. They worked together at PolyGram some years ago and Ames has no desire to repeat the experience.
Nicoli is believed to have offered owner AOL Time Warner more than £600m as well as a significant stake in the merged company, possibly as much as 40%, in return for its music division.
He raised £150m through a bond issue ten days ago and unexpectedly announced further plans to raise £210 million with another bond issue soon.
Though EMI, home to Kylie Minogue, Robbie Williams and Coldplay, said it was doing this to help restructure its considerable debt of £860m, the move also gives it more freedom to make acquisitions.
Warner, whose artists include Madonna, Red Hot Chili Peppers, and BMG, which boasts Christina Aguilera and Pink, have been discussing merging their recorded music businesses for nearly four months.
The aim is to create a 50:50 joint venture that would be the second-biggest music firm in the world behind Universal. But disagreements over management structure have stalled negotiations.
A source close to the talks said: 'We have had problems over the responsibilities of the senior management of the new entity. We are not seeing eye-to-eye on this.'
Ames and BMG chairman Rolf Schmidt-Holz have spearheaded the talks rather than the heads of their parent companies, AOL Time Warner and German publishing group Bertelsmann.
Now, senior executives at AOL, which will change its name to Time Warner in the next few weeks, have been in talks with their counterparts at EMI.
Nicoli has a good relationship with AOL chairman Dick Parsons, while Levy has been in talks with Jeff Bewkes, head of AOL's entertainment and networks group.
