Terra Firma loses EMI deal case

Private equity group Terra Firma was not tricked into paying over the odds for music group EMI by US bank Citigroup, a jury has ruled.

Terra Firma, which is owned by English financier Guy Hands, had tried to claim £7 billion in damages over the £4.2 billion transaction, which was mainly financed by Citigroup.

According to Terra Firma, Citigroup had pretended another interested party was considering bidding when, in reality, there were no other bidders. This led to an inflated price for the deal, lawyers had claimed, but a New York jury found unanimously in Citigroup's favour.

A Citigroup spokesman said: "We are very pleased that the jury reached a unanimous verdict confirming what we have said from the beginning: that Citi and (UK investment banking head) David Wormsley treated Terra Firma with honesty and integrity in the EMI transaction.

"The jury's verdict makes clear that Terra Firma's irresponsible accusations of fraud were nothing more than a misguided attempt to gain leverage in debt restructuring negotiations."

Terra Firma said it reserved its right to appeal against the decision.

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