EMI Group saw its shares sag more than 5 per cent today on growing concerns that antitrust issues were making a music merger with Bertelsmann too difficult to pull off.
While both companies have been putting on an optimistic front, antitrust issues continue to loom large five months into talks and analysts said the likelihood of a full merger was becoming increasingly slim.
EMI shares were five per cent down at 446p on the London Stock Exchange this morningwith almost two million shares traded, after earlier slipping as much as 6.5 per cent.
EMI has always been the more cautious of the two sides having had its fingers burned once already after pulling out of previous merger talks with Warner Music in the face of mounting opposition from European regulators.
This time around, EMI was determined not to pull shareholders through a lengthy investigation and the two sides have unofficially been testing the regulatory waters before deciding whether to unveil a deal.
However, analysts say piecing together a merger which both satisfies regulators and provides shareholder value is proving difficult.
My gut feeling is that a merger is becoming an increasingly less likely outcome, one analyst said.
