Universal Music has upped the ante in its efforts to gain approval for its proposed purchase of EMI's recorded-music division, offering to sell off even more parts of EMI, according to a report in Financial Times. The European Commission rejected UMG's initial offer of divestments, which included Virgin Records and other assets, according to the Guardian.
UMG CEO Lucian Grainge is offering indie labels represented by Impala a "first right" to bid for properties worth €250 million in annual revenues, along with a €25m "funding mechanism," including €15m, to help Impala purchase those assets, the report said.
Grainge has reportedly told Impala he is prepared to sell assets including Chrysalis UK (minus Robbie Williams), Ensign, Mute, EMI/Virgin Classics, Jazzland and Sanctuary. Although it seems that Virgin may no longer be part of the deal, Virgin founder Richard Branson told the Guardian that he has begun talks with Universal about buying the label.
"I have had informal talks with both Lucian Grainge and [ Virgin France founder] Patrick Zelnik about Virgin Records," Branson told the paper. "I have known Lucian and Patrick for both 30 years. They are great record men and Patrick has committed to revitalise Virgin Records - which has been mismanaged in the last 10 years."
Both Impala and digital-rights group Merlin opposed the Universal-EMI deal earlier this week, although Zelnik, head of French indie Naive and a co-founder of Impala, surprised the organization by writing an editorial supporting the sale; he later revealed that he and Virgin Records founder are exploring the possibility of puchasing Virgin should it become available. He told Billboard.biz today that although he has offered to resign from Impala, he has not done so yet.
The report said that Kenny Gates of indie distributor PIAS and Daniel Miller of Mute Records said they are interested in buying EMI assets, although Martin Mills, whose Beggars Group is Europe's largest independent music company and who spoke fervently against the merger during a U.S. Senate hearing last month, is still opposed to the deal.
A source close to the situation told Billboard.biz that UMG expects the EC to begin test-marketing its remedies package tomorrow or Monday.