PE tycoon drops legal battle against Citigroup

Guy Hands, the founder of London-based private equity firm Terra Firma, has dropped his legal battle against Citigroup regarding his company’s takeover of record label EMI.

Mr hands was seeking £1.5bn in damages after claiming the investment bank misled him over the 2007 deal, with Citigroup denying the allegations.

Terra Firma snapped up EMI for £2.4bn just months before the financial crisis.

After the case was dropped, Guy Hands’ company agreed to pay Citigroup’s costs, according to a report by the BBC.

The New York-headquartered company, which called Terra Firma’s case “entirely baseless”, said in a statement: “We are pleased that Terra Firma has unreservedly withdrawn the allegations, agreed to the dismissal of the proceeding and will pay Citi’s costs in relation to this matter.”

Mr Hands said although his initial claims were “brought in good faith”, he said it became “evident that our documentation of the fast-moving and complex events, and memories of these events after nine years, are no longer sufficient to meet the high demands of proof required for a fraud claim in court”.

Speaking further, Mr Hands said that as the case is now closed, his company is “looking to the future”.

He continued: “We have an exciting portfolio of companies, a talented and experienced team, supportive and loyal investors and one billion euros of capital to invest.”

Citigroup served as an advisor to EMI during the the 2007 deal while also providing around £2.5bn in debt to Terra Firma for the transaction, helping the firm earn millions in fees.

When sales dipped in the wake of the takeover, Citigroup took control of EMI in 2011.

A US lawsuit brought against Citigroup by Mr Hands – who claimed that the investment bank led him to think that other parties were expressing interest in EMI – ended in 2014 when jurors decided the firm had not misled his company.

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →