updated 8/1/2007 9:44:10 AM ET 2007-08-01T13:44:10

Private equity firm Terra Firma Capital Partners said Wednesday it has succeeded in its $4.9 billion takeover of music company EMI Group PLC, garnering the 90 percent of shares needed to let it force out minority shareholders.

Terra Firma said it had accumulated acceptances representing 90.27 percent of EMI, home to artists such as The Beatles and Coldplay.

Britain's Competition Commission had granted EMI until 1 p.m. local time Wednesday to reach the 90 percent level, above which it was able to forcibly buy the remaining shares.

EMI shares rose 2.4 percent to 260 pence on the London Stock Exchange.

Terra Firma initially struggled to win over EMI shareholders despite a recommendation from the music company's board to accept its 265 pence per share offer made in May.

The firm, headed by financier Guy Hands, extended the deadline several times as investors held out in the hope that EMI's on-again, off-again suitor Warner Music Group Corp. would come forward with a rival bid.

Its fortunes changed last week when Warner ruled itself out of the bidding for the London-based company, whose artist roster also includes the Rolling Stones, Kylie Minogue and Joss Stone.

Music companies have been looking to consolidate as the market for CDs declines rapidly. The International Federation of the Phonographic Industry estimates that overall music sales fell around 3 percent in 2006 as a doubling in digital sales failed to compensate for declines in physical CD sales and digital piracy.

EMI is struggling more than most and has cited disappointing North American CD sales for profit warnings. But analysts say that the overall industry's woes do not entirely explain EMI's poor performance, pointing out that Warner and Universal have weathered the storm better.

They instead highlight EMI's persistent weakness in the United States, lack of promising new tunes and internal control problems.

Warner, home to recording artists including Madonna and Red Hot Chili Peppers, held merger discussions several times with EMI over the past seven years. But the talks were often stymied by regulatory uncertainty and the inability to agree on a price. Its last US$4.2 billion approach was rejected in March.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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