From a morning press release:

The Board of EMI Group plc (EMI) provides an update on its position regarding its proposal to acquire Warner Music Group Corp. (Warner Music) following the decision of the European Court of First Instance to annul the European Commission’s authorisation of the SonyBMG joint venture.

As previously announced, since 1 May 2006, EMI has made two proposals to acquire Warner Music and Warner Music has made two alternative proposals to acquire EMI.  When the Board of EMI put forward its proposals to acquire Warner Music it believed, and continues to believe, that there are good arguments for regulatory approval of a combination.

EMI’s most recent proposal, dated 23 June 2006, was to acquire all of the outstanding shares of Warner Music for US$31 per share in cash. Whilst the Board of EMI believed that an offer at this level represented full and fair value for Warner Music, the Board of Warner Music rejected it.

Against this background, the Board of EMI has decided not to pursue a combination with Warner Music for the time being.  The Board will review this position in the light of future developments.

EMI’s focus remains on driving its recorded music and music publishing businesses forward.  EMI remains confident that the global music industry has excellent long-term prospects driven by the rapidly expanding demand for digital music. EMI is enjoying impressive creative momentum and has exciting release schedules for both divisions for the financial year.  It is generating very high growth in digital sales and is on track to deliver the expected cost savings from its latest restructuring plan.  EMI believes that it will, in this financial year, again deliver a strong operating performance, achieve its financial objectives and make good progress.