EMI, AOLTW, BMG:
LET’S MAKE A DEAL

Inside spewers are now spewing that EMI is definitely in talks with both AOL Time Warner and Bertelsmann regarding a possible transaction.

On the Warner Music Group front, those in the know are saying, if there is a deal to be made, EMI is the buyer. AOLTW topper Richard Parsons doesn’t view music as crucial to the conglom’s future and would probably part with WMG for about $3 billion, insiders say.

Questioners are questioning where Alain Levy and company would get that kind of cash. One theory making the rounds is that EMI might finance the acquisition by selling off either EMI Publishing or Warner/ Chappell, either of which, most believe, would fetch about $2 billion. That leaves $1 billion for EMI to raise, most likely through a private placement led by alternative-investment powerhouse The Blackstone Group.

Some observers are countering that Bertie’s BMG would be a better fit for EMI, but EMI reportedly would rather make a deal with AOLTW. Something about the cable reception in London.

As for Bertelsmann, some BMG insiders are whispering that there may be some truth to the latest rumors swirling around Rolf Schmidt-Holtz taking the German conglom’s RTL television gig, leaving Michae Smellie as head of the music holdings.. These observers are now noting. if Schmidt-Holtz were to move over to the TV side, it wouldn’t necessarily mean the end of his music run.

Which would be good, because we still have a wealth of German humor on the back-burner.