Record company EMI posted higher than expected first-half pre-tax profits and sales and said talks with media giant Time Warner to acquire the Warner Music recorded music business were progressing well.
EMI, the world's third-biggest music company and home to rock bands Pink Floyd and Radiohead, said its two-month discussions with Time Warner were at an advanced stage and it had put a firm proposal on the table for Warner Music.
After warning earlier this year that weakness in Japan would dent first-half results, EMI posted an adjusted pre-tax profit of £39.4 million in the six months to end September.
That compares with a £42.2 million profit in the same period last year and analysts' consensus forecast of £23.7 million.
Sales were broadly flat at £960.3 million after outperforming a 10 per cent slump in the recorded music industry to raise its market share to 12.9 per cent. However, EMI said it was too soon to make predictions for the rest of the year.
London-based EMI has been in talks on taking over Time Warner's recorded music business as rival music companies seek to join forces in an industry that faces a gloomy outlook of rampant piracy and falling sales.
EMI has been discussing a deal that would give Time Warner $1 billion of cash and a 20-25 per cent stake in the enlarged music business, sources familiar with the situation said.
In a separate statement, EMI said Mr John Gildersleeve would join its board as deputy chairman and senior independent non-executive director to replace Mr Dominic Cadbury.