Hand challenges Citigroup over EMI sale
Guy Hands, the founder of Terra Firma Capital Partners, testified in his $8.3bn (€6bn) fraud suit against Citigroup that his firm wouldn't have bid on EMI Group if he'd known there were no other bidders.
Mr Hands (51) claims that Citigroup's David Wormsley tricked him into overpaying for EMI, a 113-year-old music company, in a 2007 auction. Mr Hands testified yesterday on the second day of a trial in the US District Court in Manhattan.
Mr Hands claims Mr Wormsley lied to him in a series of phone conversations over the days leading up to the May 21, 2007, auction for EMI, falsely telling him that Cerberus Capital Management planned to submit a competing bid.
"If he hadn't made those statements, we wouldn't have been bidding that day at all," Mr Hands told jurors.
Mr Hands also said that several rival bidders dropped out in the days before the May 21 deadline for bids, including Fortress Investment, Warner Music Group and JPMorgan Chase's One Equity Partners.
He said that on the final weekend before the auction, Mr Wormsley, whom he described as his friend and business associate, told him that Cerberus remained in the auction and was bidding £2.62 per share.
Citigroup, which provided $4.71bn in loans to finance the $6.7bn acquisition, said Mr Wormsley didn't lie to Mr Hands and didn't even know that Cerberus had decided not to bid.
Terra Firma based its bid on its own estimate of EMI's value, not on any statements by Mr Wormsley, said Citigroup. (Bloomberg)