Warner Music is likely to make a £470m bid for EMI's recorded music division and may file its proposal with parent company Terra Firma within weeks, reports the Guardian.
The private equity company owned by Guy Hands has been under pressure from Citigroup, its core creditor, to negotiate a deal after the US investment bank lent it £2.8bn to buy EMI three years ago.
Hands has been struggling to fend off Citigroup from assuming control of the troubled record label. He lost a court case last week in which he claimed that Citi misled him into over-paying for the record label three years ago when it lent Terra Firma £2.8bn to complete the £4.6bn deal.
The Citigroup is reportedly in favour of selling off EMI's recorded music division to Warner Music as part of a debt-reduction programme. As an alternative, Citigroup's bankers could offer to cancel debt in return for taking control of EMI's music publishing arm, which owns the rights to albums by artists such as Pink Floyd and The Beatles, and is valued at more than $2bn.