Universal 'closes in on EMI acquisition'

The future of struggling major label EMI Music could be sorted by the weekend after Universal Music stepped closer to agreeing a $1.5 billion-plus deal with owner Citigroup.

Universal is said to be the only bidder remaining for EMI's recorded music division, the home of Katy Perry and Coldplay, after previous favourite Warner Music withdrew its own $1.5bn (£944m) offer.

Separate reports suggest that Sony/ATV will rival BMG Rights for EMI's music publishing division, which is thought to be worth around $2bn, according to The Guardian.

Universal is understood to be keen to get access to the hugely profitable rights to The Beatles' back catalogue, although the deal could still fall apart at the last minute.

Last month, Warner Music - the label acquired by Len Blavatnik's Access Industries in May for $3.3bn (£2bn) - came close to agreeing a deal with Citigroup, but was ultimately put off by efforts to drive up the price.

Citigroup took control of EMI in February after Guy Hands's Terra Firma private equity vehicle could no longer support the label's debts and costs.

Warner was expected to come back to the table with a last-ditch bid for EMI's recorded music division, but there had been no contact between the firm and Citigroup by late yesterday.

"The only way the [Warner Music] deal is not dead is if Citi come back on valuation, that call hasn't happened," said a source close to the situation.

This means that Universal is the frontrunner for the deal, although Citigroup could yet decide to hold on to EMI's recorded music division and instead just offload the publishing arm, which owns the rights to 1.3m songs including work by Arctic Monkeys, Kanye West and Jay-Z.