Chrysalis today rejected a £104 million takeover offer from EMI and said that it was no longer talking with potential buyers.

EMI's offer valued Chrysalis shares at 155p. They dropped 16 per cent to 113p after the statement.

The Times revealed recently that Warner Chappell, the music publishing arm of Warner Music, had exited the process, leaving EMI in discussions with Chrysalis.

However, after a period of due diligence and in the light of the global credit crunch, sources said today that EMI had cut its original £150 million offer.

In a trading statement today, Chrysalis reiterated this claim but admitted that its profits from royalties in the six months ending in February are expected to be down 10 per cent on the same period last year.

It added that profit margins had been affected by the recently ended screenwriters’ strike in the US and uncertainty over the company’s ownership had impacted on its ability to sign new artists.

In a statement today, Chrysalis blamed “global economic and credit market conditions” for warding off potential suitors over the past four months by limiting their ability to make firm offers.

“The board does not believe that the optimal conditions for extracting maximum value from its assets currently exist for shareholders,” the group said.

"As a result, the board is terminating the process and Chrysalis can confirm that it has ended discussions with potential buyers.”

Last July the company sold off its radio business to Global Radio, the UK’s largest publicly traded radio company, for £170 million in order to focus on its music publishing catalogue.

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