A financial advisor for Warner Music Group contacted major shareholders of EMI Group this week offering to increase its bid for the London-based company, but the two music rivals are no closer to striking a deal, according to sources familiar with the discussions who asked not to be named because negotiations are ongoing.
At least one Warner Music advisor contacted EMI shareholders on Wednesday to inquire whether a deal could be struck at a purchase price of 340 pence, or $6.29, a share, said sources close to EMI. That would be equivalent to $4.8 billion -- a modest increase over the company's previous bid last month of $4.6 billion.
The bid was not authorized by Warner Music management and was rebuffed, the sources said. It was the latest round in volleying bids that began in May by the two companies to buy each other.
"Our shareholders have no interest at 320 or 340," an EMI financial advisor said. "A serious offer for us is one that begins with 4 pounds."
Representatives of both companies declined to comment.
After a report in the London press Friday that Warner was considering raising its bid, shares of EMI increased 12.75 pence, to close at 313.75 pence.
The stock has climbed 29% this year, putting a value on the company of about 2.48 billion pounds, or $4.59 billion.
Last month, EMI offered to acquire New York-based Warner Music for $31 a share, or $4.6 billion. But Warner rejected the offer as too low. Some of Warner's controlling shareholders have indicated that they are seeking a bid closer to $35 a share for the company, according to insiders with knowledge of the talks.
It is unclear whether executives at either company were aware of this week's discussions, or whether they occurred between financial advisors eager to spur a deal.
"Warner management has not authorized anything above 320 pence," a Warner Music source said. "This is just bankers talking to bankers."
Combining Warner and EMI would create the second-largest music company with nearly 25% of global recorded music sales.
Vivendi's Universal Music Group, based in New York, is the industry leader.
EMI's roster includes the bands Coldplay and Gorillaz, and Warner Music has such artists as the Red Hot Chili Peppers and Green Day.
Executives at both companies said a merger was "inevitable" and that a deal could be struck by the end of the month. The companies have been eyeing each other since at least 2000.