Someone Is Playing EMI a Love Song

British music giant EMI Group said Thursday that it has been approached by a suitor about a possible purchase.

The announcement followed a 23% surge in EMI’s stock price amid rumors Wednesday that billionaire Kirk Kerkorian was running numbers on EMI in anticipation of a purchase.

Under British law, a public company is required to confirm whether it has been approached by a suitor if its stock price rises more than 10%, sources said. The stock soared 23% in Britain on Thursday, valuing the company at about $8.3 billion. The firm’s U.S. shares jumped $3.88 to $21 in over-the-counter trading.

Representatives for Kerkorian and EMI denied Thursday that Kerkorian or anyone representing him had contacted or met with anyone at EMI. High-level sources at EMI, however, confirmed that Seagram officials have made overtures in recent weeks regarding a purchase--as they have several times over the last two years.

Seagram, however, has yet to put in a bid for EMI--and such an offer is not likely to be made any time soon, analysts said. Based on the current stock price, EMI’s sales price could be steep--about $9 billion, analysts said.

EMI Chairman Colin Southgate declined to comment Thursday, but he has repeatedly denied that the company is for sale.

Seagram chief Edgar Bronfman Jr. would like to buy EMI, but sources say he does not believe the company is worth $9 billion. If the price could be shaved by about $2 billion, they say, Seagram could snap up EMI before the end of the year.

Although Seagram’s Universal Studios film division continues to struggle, Bronfman and his record chief, Doug Morris, have transformed the company’s music division into an industry powerhouse.

If Seagram were to purchase EMI, Universal Music would become the No. 1 record company in the U.S., with the biggest music-publishing division in the world. Such a deal would also transform Universal into one of the top three music conglomerates on the planet.