The end of EMI is nigh?
Sooner or later - and it may be sooner - we are likely to see the end of a once great British corporate name, and a still resonant name in the music business, EMI.
Because those close to EMI tell me they expect Citigroup, the giant US bank, to seize control of the business and then quickly sell it off in pieces.
For reasons that aren't entirely clear to me, there is a belief at EMI's current owner, Terra Firma, that Citi may attempt to take control of EMI fairly imminently - although I am not sure how that can happen earlier than March (see below).
The expectation is Citi would then sell EMI's music publishing arm to the private-equity house KKR for about £1.2bn.
And EMI's recorded music business would be expected go for just £400m, probably to Warner Music - though such a takeover would face tough scrutiny by the European competition authority.
In theory, Citi won't have the formal right to take ownership of EMI until at least March, because that's when Terra Firma expects to be in formal breach of the terms of its borrowing agreement with Citi (Terra Firm will probably pass this month's covenant test).
Citi is owed £3bn in respect of Terra Firma's takeover of EMI, which is considerably more than EMI is worth today. So it looks as though Citi will ultimately lose about half its money.
As for Terra Firma, the equity it put into the deal of £1.7bn is currently worthless.
If EMI is worth around £1.6bn today, which - I am told - is what Terra Firma's founder Guy Hands believes, then Terra Firma will end up losing the lot.
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