Will Murdoch bid for EMI?

SHARES IN EMI, the music group, surged by 17 per cent in late trading yesterday on rumours that Rupert Murdoch's News Corporation is planning to take a significant stake in the company. The shares, which hit a five-year low of 300p in October, gained 56.5p to close at 392p on heavy volume of 7 million shares traded.

EMI, which is due to report interim profits next week, has been a constant source of takeover speculation. Back in July it rebuffed suggestions of a possible bid from News Corp, saying it had not received an approach from the company.

EMI broke off talks with Seagram last year after discussions about a possible pounds 5bn bid for the premier British music company. Seagram subsequently bought PolyGram instead.

EMI refused to comment yesterday on what it described as "market speculation". It is not thought that News Corp and EMI have held talks. Analysts said the share surge may have been caused by an article in a US trade magazine.

Analysts added that the deal would have some logic for Mr Murdoch, as his media empire has virtually no exposure to the music industry. However last year News Corp acquired Mushroom Records in Australia, a move seen by some as signalling an interest in adding music to his newspaper, film and television group.

With digital television adding so many more channels, media groups are becoming increasingly interested in "content" such as films and videos to fill airtime.