EMI 'back in Warner's sights'

The two parties are said to have met in recent weeks to discuss how they would structure a deal for EMI, which is expected to be put up for sale this summer.

Warner has long coveted EMI's recorded music division, while KKR is thought keen to acquire EMI's music publishing arm, which owns the rights to songs such as Over the Rainbow and Santa Claus is Coming to Town.

The interest comes as EMI prepares a rescue plan that it hopes will convince investors to stump up another 120m and prevent it being taken over by its lender, Citigroup.

Bankers have reportedly valued the music publishing division at 1.2bn, but the uncertainty makes it much harder to place a price on the recorded music business, which generated 55 per cent of EMI's 293m earnings last year.

Any approach for EMI is unlikely until the company has resolved its stand-off with Citi, under which it has to find 120m to deal with a covenant breach on its 3.2bn of loans by mid-June.

An EMI and Warner Music merger would bring together EMI's stable of artists including Coldplay and Robbie Williams with Red Hot Chili Peppers from the Warner camp.