July 5 (Bloomberg) -- Terra Firma Capital Partners Ltd.'s 2.4 billion-pound ($4.8 billion) offer for EMI Group Plc was accepted by shareholders with just 3.6 percent of the stock, indicating investors are holding out for a higher bid.

The offer has been extended for a second time, until 1 p.m. U.K. time on July 12, London-based Terra Firma, Guy Hands's buyout firm, said today in a statement. Terra Firma bid 265 pence a share in cash for the record label of the Beatles on May 21.

EMI recommended Terra Firma's offer because it delivers ``cash now, without regulatory uncertainty.'' Shareholders may be waiting for a bid from Warner Music Group Corp., which said last month that it was considering making a new offer after EMI rejected its 2.1 billion-pound takeover bid in March. EMI and Warner abandoned bids for each other last July on concern a deal would be blocked by European Union competition regulators.

``They are not making any progress getting people to accept,'' Alex DeGroote, an analyst at Panmure Gordon, said today in an interview. ``If you were a shareholder you would possibly be sitting on your shares until the last possible moment in case Warner comes up with a higher bid.''

Shares of EMI added 0.25 pence, or 0.1 percent, to 268.5 pence in London. The stock has traded higher than 265 pence since Terra Firma made its offer, on speculation the world's third- largest music company would receive a counter bid. Before today shares of New York-based Warner had fallen 37 percent this year.

Will Tanous, a spokesman for Warner Music, said the company has no comment on EMI.

EMI, Warner

EMI and Warner abandoned efforts to buy each other and form the world's second-biggest music company after the European Court of First Instance in Luxembourg threw out EU regulators' approval of the merger that created Sony BMG in 2004. The court ordered the regulator to review the transaction again.

Regulators might look favorably on a Warner-EMI combination now because Warner has secured the support of a Brussels-based trade association of independent European record labels called Impala, according to Tuna Amobi, an equity analyst with Standard & Poor's in New York. Impala opposed the Sony BMG merger and other music deals on the grounds they would stifle competition.

``Warner vaguely suggested they were considering a bid, but it's gone a bit quiet in the last two or three weeks,'' DeGroote said. ``It's a very elaborate game of poker. It's hard to call.''

EMI, whose acts include Norah Jones and Coldplay, ended talks with Permira Advisers LLP in December. EMI and Warner, facing declining music sales worldwide, have offered to buy each other at least four times since 2000.

In May EMI posted a fiscal full-year net loss of 288.5 million pounds, compared with a profit of 86.1 million pounds a year earlier. Sales in the 12 months ended March 31 dropped to 1.81 billion pounds from 2.08 billion pounds.

To contact the reporter on this story: Aisha Phoenix in London at aphoenix@bloomberg.net

Last Updated: July 5, 2007 12:00 EDT