Terra Firma Sues Citigroup Over Deal to Acquire EMI

Authored by Mark Hefflinger on December 14, 2009 - 12:12pm.

London - Terra Firma, the private equity firm that acquired major record label EMI in 2007, has filed suit against Citigroup, accusing the bank of fraud and costing it billions in lost equity on the deal, the Financial Times reported. Specifically, Terra Firma accuses Citigroup of failing to mention that another bidder existed for EMI, or the price that suitor had offered.

Terra Firma, which has been struggling to bolster EMI financially, recently petitioned Citigroup unsuccessfully to forgive $1.63 billion of the $4.24 billion it borrowed from the bank to finance the acquisition.

The lawsuit alleges that Citigroup's "misrepresentations" about the competing bid, from Cerberus Capital Management, forced Terra Firma into making a binding bid, and that Citigroup in turn prospered more from a deal between Terra Firma and EMI than it would have with any other suitor.

http://snipurl.com/tou9w (DMW previous coverage)

Published in DMW Daily, December 14, 2009

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