TOURING the City last week, Eric Nicoli, chairman of the EMI music group, could not escape questions about Coldplay — a pop group that is rarely mentioned in the sober environs of financial institutions such as Barclays and Goldman Sachs.

But there was a good reason for this. Not only had the delay in the band’s latest album been partly blamed for a 7.4% fall in sales at the EMI Music division, but Chris Martin, the maverick musician who fronts the group, had also chosen the build-up to his employer’s annual results to launch a blistering attack on the “evil” of modern shareholders.

“Deadlines mean nothing to us. We’ll sink the whole company if we have to,” Martin was reported as saying.

Nicoli attempted to laugh it off. “I suspect that his comments were made with a wry smile,” said the EMI chairman.

But now the “corporate machine” that Martin hates so much looks set to double in size.

If the latest murmurings from the music world are to be believed, EMI and New York-listed Warner Music are once again on the verge of full-blown merger talks.

At just under £2 billion, EMI is worth more than its American rival — and investment bankers on both sides of the Atlantic are clamouring for the deal to go ahead.

“The logic of it is inescapable, and always has been,” said one banker involved in the companies’ dalliance in 2000.

Then, a deal to create Warner EMI Music collapsed amid concerns about a potential competition probe, and EMI turned its attention to Bertelsmann. When those talks failed, the German company opted to merge with Sony instead.

A second attempt to combine EMI and Warner came to nothing in 2003, when Warner was sold for $2.6 billion (£1.4 billion) to a private-equity consortium led by the Seagram heir Edgar Bronfman Jr and backed by Providence Equity Partners, Bain Capital and ThomasH Lee Partners.

The recent flotation of Warner, at a hefty discount to the price sought by Bronfman and his backers but still valuing the company at $2.2 billion more than it was acquired for just over a year earlier, has triggered new talk that a deal is just round the corner.

There is obvious merit to a tie-up. A merger would create a company comparable in scale with Universal Music and Sony-BMG, and would pave the way, analysts believe, for huge cost savings. For an industry that is still struggling to cope with the internet’s impact on profit margins, the arguments are compelling.

“EMI and Warner should undoubtedly combine,” said Paul Richards, media analyst at Numis Securities. “Both companies have done a good job of taking out costs. Putting them together would create further synergies in traditional and digital sales channels.”

But while the fundamental case for a merger, which would bring together artists such as Robbie Williams and Norah Jones with Madonna and Green Day, is plain, considerable hurdles lie in the way.

Regulators may once again oppose the deal. And there are significant cultural problems — including the difficulties of deciding which executives will fill the key management roles.

“EMI has stronger management but whether Bronfman would let Alain Levy (the chairman and chief executive of EMI Music) run a combined company has to be highly questionable,” said one industry source.

If Nicoli really is set on consummating a marriage with Warner, outbursts from rebellious pop stars may be the least of his worries.

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