THE legal battle between Guy Hand’s private equity firm Terra Firma and Citigroup looks set to hinge on three phone calls Hands claims he received from David Wormsley, head of Citi’s investment banking division, it emerged yesterday.
The case, which begins in New York on 18 October, centres on Hand’s acquisition of music label EMI which he now claims he was duped into paying £4bn for. The record label’s value has halved since the deal in 2007.
Hands alleges he was told of a rival bid for EMI of 262p per share from Cerberus by Wormsley in three separate phone calls and was advised by him to bid 265p per share to secure a deal.
Terra Firma will also argue Citi had a strong motive to ensure the EMI deal happened, as it earned £6m in fees for advice to the label and £80m for financing the private equity bid.
Wormsley is expected to say one of the three calls never happened and the two other calls were about different topics.
Citi will cite the flight log for Hands’s private jet and Wormsley’s mobile phone records to say the banker called him twice for about 30 seconds each time – allegedly suggesting he left voicemails – after the plane had taken off.