Permira's EMI Offer Too Low - Paper

A potential $4.92 billion bid for EMI from private equity firm Permira has been thrown into doubt before it has been officially received because EMI believes the offer undervalues its stock, reported the Times newspaper on Monday.

EMI, which owns the rights to many lucrative recording artist such as Kylie Minogue, Robbie Williams and Cold Play, has acknowledged receiving a bid approach and a source familiar to the situation said that Permira has made contact with EMI.

Permira's offer of 310 pence per share could be made within a matter of days but it is thought that EMI wants significantly more; 350 pence per share, which has cast the deal into doubt.

This is the latest in a recent boom of high-profile private equity bids fuelled in part by the current low rates of borrowing. Many market analysts suggest that the highly-geared nature of such deals makes them high-risk ventures.