According to sources close to the matter, Shawn “Jay-Z” Carter and Beyonce Knowles have reached an agreement to purchase record company EMI for $2.5 billion. The newly-formed musical conglomerate will be called Jay-B’EMI Recordings.
Citi, which took control of embattled EMI earlier this year, is said to have accepted the couple’s bid and rejected others from the likes of Edgar Bronfman’s Warner Music Group, Steve Jobs‘ Apple, and railway tycoon Sir Topham Hatt’s private equity fund, Sodor Capital Partners.
“This won’t do at all,” said Hatt, when reached in his offices earlier today.
The deal may still face some regulatory hurdles, as a significant chunk of the $2.5 billion purchase price will come from unorthodox financing methods, sources say. That includes a $1 billion loan backed only by Carter’s master recordings and Knowles’ rear end.
The rest is said to come from the pair’s considerable holdings — FORBES recently placed Carter’s net worth at $450 million — and from an as-yet unidentified silent partner. In light of Carter’s involvement as a producer of the film remake Annie, insiders have speculated that the partner could be Oliver “Daddy” Warbucks. Given recent declines in defense spending, though, Warbucks may not have enough liquidity to support that kind of a bid. Rumors of financial troubles persist, and one source says the industrialist recently had to borrow cash from his adopted daughter.
Perhaps in an effort to scare up more funds to complete the EMI deal, sources close to Jay-Z say he may sue New York’s Metropolitan Transit Authority for copyright infringement over their use of the letters J and Z.
Representatives for Carter and Knowles did not reply to requests for comment.
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