Robbie Williams is one of EMI's big names

EMI refused to give details of its bid - rumoured to be $1.6bn - but chairman Eric Nicoli said talks with Time Warner were "at an advanced stage".

The group revealed adjusted pre-tax profits that were down 6.6% to �39.4m in the six months to September.

Sales at EMI remained flat at �758.6m, but outperformed the global industry which saw sales fall by more than 10%.

Mr Nicoli said that the negotiations to acquire Time Warner had "progressed well".

"We have made a firm proposal to Time Warner which, we believe, would create substantial value for the shareholders of both companies," he added.

A report in the Financial Times said the group had bid $1.6bn for its rival.

Take-over battle?

The takeover saga has been rumbling on for about two months, following an earlier failed attempt by the pair to link-up in 2000.

Why music companies feel the urge to merge

Meanwhile, the Reuters news agency reported that sources close to the deal said EMI might be planning to offer a $1bn sweetener to the US music giant.

The UK's biggest music firm and Time Warner are expected to hold more talks on the deal on Thursday.

But the plans could be upset by a rival offer launched by a consortium led by billionaire media investor Haim Saban and Edgar Bronfman, former chief executive of Seagram.

The private offer is expected to value the whole of Warner Music - including its Warner Chappell music publishing arm - at about $2.5bn, reports suggest.

The move follows merger plans announced by music giants Sony and Bertelsmann Music Group earlier this month.

Any such merger would allow firms to cut costs as they battle falling profits caused by widespread piracy and stiff competition.

EMI's roster of artists includes Robbie Williams, Radiohead and Norah Jones.