NEW YORK Terra Firma has restarted talks to license the North American rights for its struggling EMI Music unit to Universal Music Group for a fee estimated around $300 million over five years, according to a person familiar with the talks.
Universal Music, which is owned by French media giant Vivendi, held talks with the private equity firm in recent months but those discussions fell through.
Universal, the world's largest music company, last week denied that it was in talks with Terra Firma after reports emerged that the private equity firm hopes to raise around $600 million through licensing EMI in the United States.
Terra Firma hopes to secure an upfront cash payment ahead of a banking covenant test at the end of this month -- part of a $2.6 billion Citigroup loan secured against EMI assets. It has until mid-June to inject money to get the business back within the terms of its debt.
If Terra Firma and Universal cannot reach an agreement, it would leave only Sony Music Entertainment as a possible distribution partner in the United States. Reports on Tuesday suggested that talks between the sides have faltered.
Warner Music Group, the number three music company, is believed to be more interested in buying EMI's recorded music business and not a licensing deal.
Earlier this month, Reuters and other news outlets reported that Warner has held talks with KKR/Bertelsmann about a joint approach to Terra Firma to buy both the recorded music and publishing assets of EMI.
(Reporting by Yinka Adegoke. Editing by Robert MacMillan)