US entertainment company Warner Music Group is expected to drop a £2.5bn (€3.65bn) bid for EMI, its UK rival, as both sides conceded a recent court ruling has killed the two-way takeover battle. EMI abandoned its offer for Warner this morning.

EMI, the world's third largest music group, said it would ditch its $4.6bn (€3.6bn) bid following a European court judgement this month. Regulators reversed the 2004 approval of the merger between competitors Sony Music and BMG, casting doubt on future consolidation in the industry.