The article is about the selling of the venerable record label EMI which has been the home for the Beatles, Black Sabbath, Snoop Dogg and Lily Allen for 4 billion pounds.
US attorney Boies David claims that David Wormsley of Citigroup misled his client (Guy Hands: founder of Terra Firma) into believing that there was another bidder for the record company. Hands and Wormsley were once close friends but didn’t acknowledge each other in court.
Wormsley did a lot of effort to win the trust of Hands by telling him that he would search for the best possible outcome.
Here is a conflict of interest. Wormsley told EMI’s chief executive that he and Guy Hands on several of occasions discussed about the purchase. Citigroup was the advisor to both parties. Terra Firma confirmed its bid for EMI after they still believed there was another bidder, namely the US private equity firm Cerberus. Citigroup gave Terra Firma a deadline to decide whether they would buy EMI or not at the request of another bidder.
Boies claimed Citigroup knew that Hands would not be able to withdraw once he had placed a bid, for fear of damaging his reputation as an important player in private equity.
Theodore Wells, Citigroup’s council, said that Wormsley is an honest person who never misled Hands by lying about the interest of Cerberus. Hands buys and sells companies and tells his investors they will make a lot of money. Now this deal appeared to be a bad deal so he says he was tricked by David Wormsley rather than take responsibility. Citigroup also invested in the deal so they also suffered and didn’t at any time trick Terra Firma into buying EMI.
I think that Hands wouldn’t invest 4 billion pounds without any research whether or not it is a good investment. It could be that he is not willing to take responsibility for his acts and by going to court, the deal might not have existed when the court of New York pronounces Wormsley guilty.
Daphné V.E.
http://www.guardian.co.uk/business/2010/oct/18/citigroup-terra-firma-legal-emi
I also think that Hands wouldn't invest 4 billion pounds without doing any research. I believe that no one would ever pay so much money without doing any research.
ReplyDeleteDespite the fact that it isn't ver logical to do such an investment without exploring, I think that Hands is able to win this case because he's got quite strong arguments to proof his right and Wormsley's guilt.
Elien Lombaert 3BRP2