EMI looks set to become the centre of a bidding war after the European commission removed a significant hurdle to Warner Music challenging Monday’s 2.4bn bid for the music company from City financier Guy Hands.

The commission said the 1.63bn (1.1bn) merger of BMG Music Publishing with rival Universal Music “raised serious doubts as regards adverse effects on competition in the market for music publishing rights for online applications”.

But it has decided to clear the deal, which will create the world’s largest music publisher, after the two companies promised to divest a number of song catalogues including songs written by Max Martin’s Swedish hits factory for Britney Spears and the Backstreet Boys.

The move suggests the commission may be more amenable to clearing a link-up between EMI and Warner.

There remains, however, one major music deal still tangled in the regulatory web: the merger between Sony Music and the recorded music division of BMG. That deal was put in doubt three years ago when independent music lobby group Impala had the commission’s decision to approve the deal overturned by the European court. The commission is due to make its final ruling later this year.

Impala has since pledged full support to the Warner-EMI merger in return for promises of better cooperation and funding for a new global licensing system. Warner and EMI have been dancing around each other for almost a decade and at one stage during the dotcom boom a deal at 800p a share was mooted. Since then EMI’s fortunes have dived with a string of profit warnings and last year EMI rejected an offer at 320p a share.

Just a little over two months ago the two sides were again locked in battle, with EMI rejecting a fresh bid at a lowly 260p a share. Then yesterday EMI’s board http://business.guardian.co.uk/story/0,,2084889,00.html, Mr Hands’ investment group, at just 265p.

With regulatory uncertainty removed thanks to the clearance of the BMG/Universal deal, Warner is expected to launch itself back into the fray with an offer significantly above Terra Firma’s 265p.

As one EMI insider admitted “now the game is on”. Meanwhile, Universal’s chairman and chief executive, Doug Morris, warmly welcomed the commission’s approval.

“This is an historic moment for us as we combine the best creative and strategic assets of these two very accomplished publishing businesses,” he said. Universal is divesting assets including such catalogs as Rondor UK and Zomba UK, as well as the European rights to Zomba US. The company, however, will retain the rights to represent these catalogs in the US and rest of the world outside of Europe.

Once the deal is done, the combined company will operate under the Universal Music Publishing Group brand and will be led by David Renzer, its current chairman and chief executive.

The combined business represents acts including Mariah Carey, Paul Simon, Prince, Ludacris, U2 and Barry Manilow, EMI and Warner were unavailable for comment.

Vodafone has launched its mobile internet strategy, and claims to have made significant advances in rendering web pages for mobile devices.

The operator hinted at the strategy when it launched its first flat-rate mobile-data surfing package last week. According to Vodafone, a new way of handling content on its network will make most sites viewable on almost all its handsets.

A spokesperson said: “What we’ve done is [to] work with some of our suppliers, such as Novarra, to ensure that pages display properly. [The technology] understands how the web page is put together and repurposes that for mobile,” adding that Novarra’s technology was able to detect which handset was being used to access the content.

Vodafone’s spokesperson claimed 96 per cent of the operator’s currently available handsets - about 150 models - would benefit from the technology, because they all have a GPRS radio. Because the process involves compressing the content to roughly a tenth of its original size, users will also experience much lower data usage and higher download speeds, the spokesperson said, while conceding that some Flash-heavy sites may still not render as intended.

Many popular sites, such as MySpace and YouTube, have traditionally been difficult to render on a small screen. Vodafone, however, has already partnered with these and several other sites to deliver mobile-friendly versions of their content.

In a further development of Vodafone’s mobile internet strategy, users will be able to aggregate up to five email accounts - including webmail and POP3 - into a unified client.

When he abruptly resigned as chief executive of BP PLC («www.businessweek.com»)on May 1, John Browne left the company in disarray. The giant energy producer was struggling with a legacy of accidents and spills in the U.S. It was embroiled in a property dispute that threatened its position in Russia, a region that provides a quarter of its output. And morale had flagged as its shares, once among the hottest in the oil and gas industry, were losing ground to rivals. The job of fixing BP’s problems fell to Tony Hayward, Browne’s successor and a 25-year veteran of the company.

Browne, who rescued BP from financial trouble in the early 1990s and then built it into a global leader, once looked like he’d be a tough act to follow. But the company’s woes and revelations about Browne’s personal life that preceded his departure have made it much easier for Hayward to pursue his own instincts. While still early, it looks as though Hayward, 50, will try to boost BP’s results more with efficiency gains—possibly including job cuts—than with the wheeling and dealing that was Browne’s hallmark.

Hayward’s style so far has been the antithesis of that of his former boss. Browne was a natty dresser and opera buff who was aloof from most BP staff members. Hayward, by contrast, goes in for rugby and Eric Clapton, and often drops by the basement cafeteria of BP’s London headquarters in his shirtsleeves for coffee. On recent visits to the company’s U.S. refineries, he spent hours talking to equipment operators rather than huddled with senior managers.

While the company’s catalog of woes might seem overwhelming, Hayward is determined to restore BP’s “winning ways,” as he wrote in a May 1 staff memo. He thinks that can be done by focusing on a few key issues. The company has always been good at finding oil, whether by discovering new fields deep beneath the ocean floor or by schmoozing potentates such as Libya’s Colonel Muammar Qaddafi, who awarded BP an exploration tract the size of Belgium in May.

But Hayward realizes that BP has been weak at running basic operations such as refineries. Some think he needs to come up with a radical solution, much as Browne did at the beginning of his tenure, when he launched a wave of industry consolidation by taking over both Amoco and Atlantic Richfield in the late 1990s. One possible tactic: closer ties with a national oil company, such as Russia’s Gazprom, which would give BP huge reserves in exchange for access to its distribution network.

But first Hayward will have to demonstrate that BP can manage the sprawling array of businesses assembled under Browne. If not, hedge funds and other investors may start calling for his head and a breakup of the company. Job One will be fixing the safety problems that came to light after an explosion that killed 15 people at a refinery in Texas City, Tex., two years ago. Hayward has boosted spending at BP’s U.S. refineries—where the most serious problems have occurred—by $500 million per year, to $1.7 billion annually over the next four years. The money will go into new and better equipment as well as safety training. At the same time, BP and its partners are moving ahead with plans to renew the infrastructure at Alaska’s Prudhoe Bay oil field, which has suffered a series of leaks and other mishaps. “There can be no compromise [on safety],” Hayward said in the May 1 memo. “We must pay particular attention during this time of change.”

GIANT OIL FIELDS
Hayward needs to get the U.S. refineries running smoothly to keep up with rivals such as Exxon Mobil Corp. («www.businessweek.com») and Royal Dutch Shell PLC («www.businessweek.com»). One reason BP let the facilities deteriorate is that refining profit margins were paltry for decades. But now, with U.S. capacity tight, the business has become a major moneymaker for most companies. But not BP. The Texas City facility, which is currently operating at just about 50% capacity, is costing nearly $2 billion per year in lost profit.