An article on the CMU site speculates that there could be up to 5 parties interested in buying EMI outright.

There’s no question that having many bidders potentially adds bargaining power to Citigroup. When people believe that something they want may be in scarce supply, it often increases its value to them psychologically. Note that the operative word here is “believe”. The belief may have no foundation in reality but if it feels real to the person that holds that belief, then it may tempt them to bid more.

The last time EMI was sold, to Terra Firma, Guy Hands clearly believed there was another buyer waiting in the wings (even though there wasn’t), and that influenced his decision to spend a huge £4.2 billion on securing it. The fact that Hands subsequently had to wrote off half that value shows just how having a group of potential bidders can make a difference in price.

It’s interesting that the potential price being quoted this time is US$3.5 billion – almost exactly the same as the write-down valuation that Terra Firma arrived at. As surprising as this is, the price might go even higher if the number of genuine suitors is correct. Of course, there’s always the possibility that Citigroup might be encouraging the market to believe that there are lots of suitors in the very hope that such upward valuation will occur. Keep your eye on this one…