Speculation is rising in the music industry that two of its giants, EMI and Warner Music, could re-open merger talks as the latter's boss moves from New York to London.

Edgar Bronfman, billionaire heir to the Seagram drinks fortune, is moving into a house in Kensington with his wife Clarissa and four young children.

He wants to run Warner from London and New York, concentrating on how to beef up the UK operations, which have recently fared far less well than the US ones.

But his presence in the capital is bound to renew speculation over a merger of Warner and EMI. Both are owned by private-equity backers.

Bronfman outbid EMI for the $2.6 billion purchase of Warner Music from Time Warner in 2003. He has since slashed its debt, repairing some of the damage done to his reputation in the 1980s when he disastrously tried to turn Seagram into a media conglomerate based on Universal.

EMI was bought by Guy Hands' Terra Firma group for £2.4 billion in 2007. It is saddled with debt and recently Terra Firma had to inject £28 million of extra capital to comply with banking covenants.

Warner and EMI have had on-off merger spats for years with Bronfman and Hands holding talks as recently as last year.

As the recorded music market's third and fourth-largest players with market shares of 14.9% and 9.6% in 2008, a merger would still leave them lagging behind Universal, which has 28.7% of the market.