Terra Firma and the case with Citigroup

Terra Firma are a private equaty firm who in 2007 looked into the prospects of buying EMI. Labelled "Project Dice" many at Terra Firma probably wish they could re-roll teh dice with this one as the purchase of EMI is considerred to be one of the worst in history.

Back in 2007 when Terra Firma bought EMI they paid £4 Billion for a company estimated at £1.8 Billion, with the mistake costing Terra Firma billions and their reputation founder of the company Guy Hands wanted some sort of compensation.

There were 2 main factors that Terra Firma didn't know that caused them to put in such a high figure they ultimately blame the bank Citigroup for. Hands claims that Terra Firma didn't realise that EMI were in such a bad state. The fact EMI are in such a bad state is one of the causes that means Terra Firma are struggling with their own business as well as EMI. Though EMI has people on the books such as Katy Perry, Robbie Williams and Iron Maiden they still struggle financially making huge losses. Terra Firma are trying to come up with ideas to sort this problem such as making a deal with Warner Music but the original purchase has cost them dearly.

Citigroup the bank that were setting up the deal to sell EMI are reported as being kept up to date with buyers in the running, yet Terra Firma were not aware Ceberus, a private equity company who were going to make a 2 stage big with Warner Music, had pulled out. In the courts this week Terra Firma's lawyer David Boies claims that Citigroup were hungry for money. Another claim was that Citigroup's Mr Wormsley told Mr Hands that Cerberus were to make an offer, if Citigroup are found to be guilty it could cost them a cool £5 Billion.

With the jurers off to make their decision the story continues.

Sources: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/media/8108689/Terra-Firma-and-Citi-lawyers-close-arguments-in-EMI-case.html

http://www.economist.com/node/17314604

Picture Source: http://www.nypost.com/rw/nypost/2009/12/12/news/photos_stories/cropped/025_guy_hands--300x300.jpg