British music company EMI, owned by Citigroup, said on Monday it had launched a strategic review to examine options including a possible sale, recapitalization or initial public offering.
The news will likely kick off a process that is likely to see suitors including Warner Music Group, Vivendi SA's Universal Music Group, Sony Corp. and BMG Music Rights among parties interested in buying all or parts of the EMI, currently the world's fourth-largest music company.
The group, home to artists such as Katy Perry, Coldplay and the Beatles, said in a statement that there was no certainty that the process would result in a transaction.
However, Citigroup, which took control of EMI in February after its previous private equity owner Terra Firma defaulted on a loan, is unlikely to want to remain in the music business.
Analysts estimate that EMI could be sold for $2.5 billion to $4 billion. Warner Music, which is about the same size as EMI, reached a deal in May to be sold for $3.3 billion.
Warner Music's new owner Len Blavatnik is believed to be keen on making a bid for EMI soon after the Warner Music deal closes. Blavatnik is expected to retain the current Warner Music top management team of Edgar Bronfman and Lyor Cohen to lead any acquisition effort.
If Blavatnik makes a successful bid for EMI, he could be rewarded with a quick return on his investment by combining the companies and saving hundreds of millions of dollars in costs.
EMI had been suffocating under a burden of debt borrowed from Citigroup in a 2007 leveraged buyout by Guy Hands' Terra Firma.
EMI said it would not disclose further developments until its board had approved a strategic plan.
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