Don't wait up for Warner Music Group (NYSE:WMG). The record label is announcing that it has no intention of fronting a last-minute bid to wrestle troubled rival EMI Group (OTC BB: EMIPY.PK) out of the clutches of private equity firm Terra Firma.

It may come as a shock to EMI shareholders, if they've been living in denial since EMI accepted a $4.7 billion deal two months ago. EMI investors have refused to tender their shares to Terra Firma, forcing the company to extend its deadline twice.

Like a bride-to-be longing for an old boyfriend to show up on the eve of her wedding, EMI investors figured that Warner and EMI were destined to be together. The two labels have been volleying buyout offers back and forth since last summer.

When European regulators became critical of an earlier merger between Sony (NYSE:SNE) and BMG, Warner stepped up, agreeing to concessions to make the potential deal possible.

But it never came to be. Terra Firma came through with a superior bid, and EMI went that way. Now that Warner has bowed out of the picture, EMI investors have to concede that the nuptials will go ahead as planned.

It's just as well. EMI's fundamentals have been crumbling. Pre-tax profits fell by 61% for EMI in fiscal 2007. Revenue was off by 16%. The music industry isn't getting any better. Nielsen SoundScan is reporting that CD unit sales fell by 19% through the first six months of the year. Britain's BPI is projecting a 10% slide over the same six months in the United Kingdom.

Warner may still want EMI. It may even negotiate with Terra Firma for the pieces it covets down the road. But there's no point for Warner to overpay -- or for EMI shareowners to overdream.

More hits to continue this dance:

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Longtime Fool contributor Rick Munarriz once had his band signed to Sony's Columbia Records label. It didn't exactly pan out. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. Rick does not own shares in any of the companies in this story. The Fool's disclosure policy is always at the top of the charts.

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