Guy Hands sues Citigroup for second time over EMI deal

Private equity tycoon Guy Hands has renewed his legal battle with Citigroup following his firm's disastrous takeover of EMI in 2007.

The Terra Firma chief is seeking damages of £1.5bn and has alleged that the US investment bank misled him.

Citigroup has denied the allegations.

Terra Firma bought the famous record company, whose roster included the Beatles, for £2.4bn shortly before the financial crisis hit.

Citigroup had advised EMI, which was then listed on the stock market, but also provided finance to Terra Firma for the deal.

After its sales began to slump following Mr Hands' takeover, the bank ended up taking control of the label in 2011.

Mr Hands has tried to sue Citigroup in the US, but the case ended in 2014 when a jury found that the bank had not misled Terra Firma.

Mr Hands had argued that Citi led him to believe other parties were interested in EMI.

Despite that defeat he was now attempting to sue Citigroup at the High Court in London.

A Citigroup spokesman said the Terra Firma case was "entirely without merit".

Terra Firma's lawyers told the court that the private equity firm suffered losses of about £1.5bn, as well as additional lost profits, because of the failed deal.

Terra Firma's case focuses on a series of alleged "oral misrepresentations" by senior Citigroup bankers David Wormsley, Chad Leat and Michael Klein. All three men are being called as witnesses at the trial.

A Citigroup spokesman said: "Citi did not make any dishonest statements to Guy Hands or Terra Firma throughout the auction process for EMI and is confident the UK trial will confirm this."

Anthony Grabiner, who is representing Terra Firma, told the court that Citigroup had led the firm to believe there was another bidder after EMI.

Mr Grabiner also alleged that Citigroup did not reveal key information about EMI's creditworthiness.

Terra Firma said in documents presented to the court that a Citigroup employee had in a 2007 email described EMI as a "terminally ill cancer patient on chemotherapy".

Citigroup provided about £2.5bn of debt to Terra Firma for the 2007 takeover, helping it earn tens of millions of pounds in fees, Mr Grabiner told the court.

EMI's recorded music division was bought by Universal Music in late 2011, but was forced by regulators to sell the Parlophone label. It was home to artists including Kylie Minogue, Coldplay and Pink Floyd and was bought by Warner Music in early 2013 for almost £500m.

The case continues.