British music company EMI Group Plc rejected an approach worth 2.5 billion pounds ($4.6 billion) from smaller U.S. rival Warner Music Group, saying on Wednesday the offer was "wholly unacceptable".
Warner Music's 320 pence per share move on EMI was an attempt to take control of the company that has been pursuing it. EMI shares rose 9.6 percent to set a four-year high at 311 pence in early trading.
On May 3, Warner Music, the world's fourth largest music company and home to Green Day and Red Hot Chilli Peppers, rejected a $4.2 billion approach worth $28.50 per share from EMI, whose artists include Coldplay and Robbie Williams.EMI revealed on Wednesday it had since raised its offer -- to $31 cash per Warner Music share -- and also said it had rejected a previous offer at 315 pence per share on June 14 from Warner.
"EMI continues to believe that an acquisition of Warner Music by EMI at $31 per share in cash would be very attractive to both sets of shareholders and would deliver value to EMI's shareholders which is far superior to Warner Music's revised alternative proposal," it said.
The developments are the latest move in a long-running quest to combine the companies. A combined EMI-Warner Music would be roughly on par with music majors Universal Music and Sony-BMG, and analysts estimate a merger would produce several hundred million pounds in cost savings.
On May 23, EMI also reported a 13 percent rise in underlying annual profit. Its results included a surge in digital music sales to 112 million pounds from 47 million pounds.
The music industry expects revenues from mobile phones and song downloads eventually to offset the decline in physical formats such as CDs.
Warner Music shares fell 1.1 percent to $27.23 on Tuesday.
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