EMI yesterday reaffirmed it was in advanced talks with Time Warner over the acquisition of the US group's recorded music arm as it announced better-than-expected first-half sales and profits.

Chairman Mr Eric Nicoli said: "We have made a firm proposal to Time Warner which, we believe, would create substantial value for the shareholders of both companies."

The Time Warner board will consider EMI's $1.6-$1.7 billion (€1.3 billion) offer today when it is also likely to discuss a $2.4 billion rival offer for the whole of Warner Music from a financial consortium led by Mr Edgar Bronfman and Mr Haim Saban, US media entrepreneurs.