EMI has long hinted that it would be willing to consider a sale only at closer to 400p a share — valuing it at £3.2 billion — because the benefits of a possible future tie-up with Warner Music are so great.

That stance was supported by Insight Investment, the company’s third-largest shareholder with nearly 6 per cent. William Claxton Smith, head of investment at the firm, said: “There’s always a price for a deal, but it’s more like 400p. This is an exciting business, because of the potential for consolidation if the regulators allow it to happen.”

Negotiations between the company and Permira will continue over the weekend, amid speculation that a deal could be announced as early as next week, if agreement on price is reached. To succeed, however, Permira will have to offer a significant premium over the prevailing market price. The shares closed at 295¾p, up 9¼p.

It was not clear last night how Permira would be able to justify a valuation in excess of Warner Music’s rejected 320p-a-share offer in the summer. Warner had the advantage of massive synergies from combining its recorded music operation with EMI’s, generating savings worth, on some estimates, 170p per EMI share.

The approach is thought to be friendly to EMI’s management, led by Eric Nicoli, chairman, and Alain Levy, the boss of its recorded music arm — which could mean that Permira believes it could provide the firepower for an eventual takeover of Warner Music. Warner is itself backed by a private equity group, comprising Thomas H Lee, Bain Capital and Providence, as well as its chief executive Edgar Bronfman.

However, no Warner-EMI deal is possible until next summer, at the earliest. The European Commission has to rule on the legality of the separate Sony BMG recorded music merger; a combined Warner-EMI would be roughly the same size as Sony BMG.

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