Citi, firm head to court over EMI deal
TEXT OF STORY
STEVE CHIOTAKIS: A multi-billion dollar court battle begins today in New York. A private equity firm is slugging it out with Citigroup. The case centering on the purchase of EMI, the British-based music label whose catalog includes the likes of Frank Sinatra and the Beatles. Marketplace European bureau chief Stephen Beard is here with us live from London with the latest. Hi Stephen.
STEPHEN BEARD: Hello Steve.
CHIOTAKIS: So who’s suing whom?
BEARD: Guy Hands, the boss of a private-equity firm, is suing Citi. He claims the bank tricked him into buying EMI at the height of the buyout boom in 2007. He says Citi told him there was another bidder and that was untrue. Guy Hands says, as a result, he overpaid for EMI. He certainly did overpay. He forked out the equivalent of $6.7 billion just before the crash and EMI has since lost more than $3 billion.
CHIOTAKIS: That’s a lot of money. It sounds like there’s a lot at stake in this case, Stephen.
BEARD: Yes, very much so. Guy Hands is claiming up to $8 billion in damages. And if he wins, analyst Claire Enders says many other banks could face hefty lawsuits.
CLAIRE ENDERS: Their transactions would be questioned. And a similar sort of outcome could be imagined for the very large number of deals that were done in 2006-2007.
Citigroup denies that it misled Guy Hands. The case, however, should shine a fascinating light into some of the darker recesses of high finance at the height of the boom.
CHIOTAKIS: Marketplace’s Stephen Beard reporting from London. Stephen, thanks.
BEARD: OK Steve.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
