MISCELLANEOUS BUSINESS AND CORPORATE NEWS; EMI to be Split and Sold

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EMI Group Ltd., the British music company associated with venerable names like Beatles, Coldplay and Katy Perry, is being split into two and sold. This has been reported in The Dallas Morning News on November 12, 2011. (I) Universal Music Group will pay $1.9 billion to acquire the recording division, combining the EMI talents like David Guetta and Lady Antebellum with their Universal counterparts such as Lady Gaga and Eminem. (II) A consortium led by Sony/ATV will pay $2.2 billion to buy the publishing division. The publishing division is in charge of copyright business for songwriters which have propelled singers such as Rihanna and Adele. Sony/ATV, a joint venture of Sony Corp. and Michael Jackson's estate, owns 38 percent stake in the consortium although the names of remaining stakeholders are still not known. In the USA, UMG has a 30 percent market share, EMI has 9 percent, Sony has 29 percent and Warner Music Group has 19 percent, respectively, according to the market research firm Nielsen SoundScan. The CEO of Vivendi SA, owner of the Universal Music Group, Jean-Bernard Levy expressed hope on November 11, 2011 that the deal might be closed in August 2012.

 ******** HISTORY OF EMI *********** 

 Private Equity firm Terra Firma acquired EMI Group in 2007 for $6.8 billion. The acquisition was financed by Citigroup. The bank put EMI on sale block in June 2011 after Terra Firma was unable to continue paying for the ill-fated acquisition. 

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*********************************  EMI to be Split and Sold ***************************

MISCELLANEOUS BUSINESS AND CORPORATE NEWS

Activist Investor Takes Stake at Another Corporate Icon Headquartered in North Texas

Elliott Investment Management takes an important stake at the Southwest Airlines after investing $2 billion that has made the activist firm an important player with about 11% share in the Dallas-based airline company. On June 10, 2024, the activist investor sent a letter--signed by Elliott's portfolio manager Bobby Xu and partner John Pike--to Southwest Board of Directors, calling out the airline's subpar financial performance and "poor execution". The letter recommended three key action plans:

* Enhance the board

* Upgrade leadership [implies management overhaul]

* Undertake business review

In May 2024, Elliott Management wrote a similar letter to Texas Instruments, critiquing the semiconductor firm's high capital spending that prohibited the deserving returns to the shareholders. Elliott bought 1.3% stake in TI by investing $2.5 billion. 

Southwest Adopts "Poison Pill" to Thwart Takeover

The Southwest Board of Directors on July 3, 2024 adopted a poison pill that would make Elliott Investment Management's bid to take over the airline, or even to force the management out, a lot costlier. The poison pill, formally called the Limited Duration Shareholder Rights Plan, will trigger empowering the existing shareholders to buy shares at 50% discount if any shareholder buys more than 12.5% stake, or if the existing shareholders who have already more than that trigger point [12.5%] buy any additional shares. Elliott now holds 11% of the Southwest Airlines (based on the common stocks, not based on the beneficial ownership). If it acquires more than 12.5% shares, it's value will be diluted significantly, according to the poison pill. 

Elliott Holds 8.2% Beneficial Ownership in Southwest

According to an August 13, 2024, sharing of the Securities and Exchange Commission filing, Elliott Investment Management now owns 8.2% beneficial ownership in Southwest Airlines, according to the August 25, 2024, edition of The Dallas Morning News. Once the activist investor reaches 10% threshold, it will have the ability to call for a special shareholder meeting.