EMI to split from Thorn rentals group Value of music giant is put at $9.5 billion

August 17, 1996|By BLOOMBERG BUSINESS NEWS

LONDON -- Thorn-EMI PLC shareholders yesterday approved a plan to split the company's consumer rentals and music recording businesses. Shares in the two companies will begin trading separately Monday.

Thorn PLC, which includes consumer rentals businesses like Radio Rentals and Crazy George's in Britain and Rent-A-Center in the United States, will be spun off as a separate company.

EMI Group PLC will include the EMI music business -- which released the Beatles' Anthology albums -- along with the HMV music store chain and Dillons bookstores.

Thorn-EMI shares rose 44 pence, or 2.5 percent, to close at 1,833 pence yesterday.

Analysts said EMI, which will be the world's only top-five recording group without a larger corporate parent, is a likely takeover target.

Merrill Lynch analyst Wayne Sanderson values the company at 6.1 billion pounds ($9.5 billion).

EMI's labels include Virgin and Capitol and are home to a strong roster of artists, including Garth Brooks, George Michael, Tina Turner and the Rolling Stones.

Its music publishing unit owns the rights to more than 1 million titles.

EMI "is ripe for a bid whatever the scenario," said Dennis Exton, an analyst with Nikko Europe.

If the music industry continues the sluggish growth shown so far this year, another major record company could buy EMI and achieve economies of scale for the long term.

If consumers' appetites for recorded music picks up, suitors anxious to build market share are likely to snap up the company sooner rather than later, he said.

Moody's Investor Service this week lowered the debt ratings of Thorn-EMI North America Holdings Inc.

Pub Date: 8/17/96

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