EMI's board of directors has recommended the acceptance of an offer of £2.65 pence per share (currently US$5.23) from Terra Firma Capital Partners, according to a statement issued by the company, though the deal must still be approved by the firm's shareholders.
Terra Firma's bid was reportedly the best among a number of proposals EMI received, though Warner Music could still make a higher offer, according to the Associated Press. EMI recently rejected a takeover bid from the rival record company.
The proposal caused EMI's stock price to rise by almost 9% yesterday.
The recorded music giant, which announced a radical restructuring plan earlier this year (leading to hundreds of job losses on both sides of the Atlantic), reported a net loss of $569 million in its most recent earnings release, following a profit of $170 million in 2006. The loss was caused by $819.4 million in restructuring, amortization and financing costs, according to the AP.
"Terra Firma's offer delivers cash now, without regulatory uncertainty and with the minimum of operational risk to the company," said EMI chairman John Gildersleeve.
Warner and EMI first attempted a merger in 2000; he following year EMI ended merger negotiations with Bertelsmann's BMG. In 2006, EMI bid to purchase Warner, then Warner counter-bid for EMI. On February 20 of this year, EMI confirmed another approach from Warner, and on March 3 the company rejected Warner's Ô£2.1 billion takeover bid.
Terra Firma is run by Guy Hands, one of Britain's leading financiers. He told the BBC that the deal would enable EMI to "build on its current position as one of the world's leading music companies and accelerate the development of its digital and online strategy to fully exploit this long-term growth opportunity".
The employment rights of EMI staff and the firm's pension commitments would reportedly remain unchanged following the deal.
Among the living classical artists on the EMI roster are violinists Maxim Vengerov, Anne-Sophie Mutter and Sarah Chang; pianists Leif Ove Andsnes, Evgeny Kissin and Martha Argerich; singers Deborah Voigt and Rolando Villaz‹n; and conductors Riccardo Muti and Charles Dutoit. The company's best-selling classical artist remains Maria Callas.
EMI's record sales, like those of all major record companies, have lost ground to digital downloading.