Pali Research analyst Richard Greenfield recently recommended that course of action in a note issued Tuesday.  “We continue to believe the best way for Citigroup to maximize the value of the debt it holds in EMI is to push for a break-up of the company, selling EMI’s recorded music division to Warner Music and either leaving Terra Firma with EMI’s music publishing arm or auctioning the asset to another bidder,” Greenfield relayed.

Over the next few months, Terra is likely to meet its covenants, thanks partly to Beatles reissues and licensing initiatives.  Just recently, the company was described as ‘barely’ meeting its financial deadlines by one well-placed executive, thanks partly to equity injections by Terra. 

And what about that possible purchase by Warner Music Group?  This is a familiar dance, though necessity could prompt some sort of consolidation.  Warner has enjoyed a recent increase in its share valuation, added ammunition for a potential play.  Warner offers its quarterly financial summary next week, another glimpse into its ability to acquire.

This story has been provided by our content partner Digital Music News.