Warner Music not being bought, for now

After getting tied up in a bidding deadlock recently, EMI and Warner Music (WMG) have decided for now to give up on their takeover plans. WMG stock fell as expected on Thursday, but the initial overreaction on the downside was shortlived.

It is time to accumulate WMG stock slowly. It is attractive, though not anywhere close to being a bargain. The upside will come from WMG's growth on the digital distribution side. A takeover may still occur months or years from now, and the 2% dividend should provide some comfort while you wait.