NEW YORK ( TheStreet) -- With Citigroup's auction of EMI, the British music label it repossessed from Guy Hands' Terra Firma in February only a week away, buyout investor Ronald Perlman has reportedly joined in negotiations along with other music labels and private equity investors.
The Financial Times reported Perelman's interest in the famed music label that Hands' Terra Firma bought in 2007 for $6.5 billion and lost under a burden of debt and revenue below projections. When Citigroup (C - Get Report) seized the music-label, which owns rights to The Beatles music and was founded in 1931, it wrote off the $4.3 billion in financing it provided Hands to make the acquisition. Up for auction by Citigroup are EMI's music label, which is expected to draw up to $1.5 billion and its music publishing arm, expected to raise as much as $2.5 billion.
The sale will be the largest music industry buyout since buyout veteran Len Blavatnik and his Access Industries bought Warner Music Group for $3.3 billion in May. Blavatnik is considered to be one of the bidders for EMI either in its entirety or for just its record label, called EMI Music.Perelman, like the other bidders for Warner Music, are back at the deals table after losing out to Access Industries this spring. The fragmented nature of the sale of EMI in two parts, the familiarity of bidders with each other and the overlaps each has with EMI's music and publishing arms will make for a compelling final week of auctioneering. Some bidders like BMG, a joint venture between private equity firm KKR (KKR - Get Report) and German media conglomerate Bertelsmann and Sony may look to buy just EMI's music publishing arm, while Universal Music Group, owned by French media conglomerate Vivendi, may buy just the recorded-music EMI Music. Because of specific interests in the two part auction, Perelman and Blavatnik may look to partner in a bid with conglomerates like Vivendi. In May, Perelman bid with Sony in his failed Warner Music buyout attempt and may look for partners in an EMI bid.