Who the Heck Wants to Invest in Music These Days? Lots of People
Who the Heck Wants to Invest in Music These Days? Lots of People

Terra Firma Capital Partners LP has asked a U.S. appeals court for a new trial over its claims that it was deceived by Citigroup Inc. while bidding for EMI Music, according to numerous reports. The case originally went to trial in October 2010. A jury deliberated less than a day after a two-and-a-half-week trial.

The private equity firm alleges Citigroup, which financed Terra Firma's eventual acquisition of EMI, convinced Terra Firma there was another bidder interested in the music company in 2007.

Citigroup Takes Over EMI

A jury found Citigroup did not trick Terra Firma into overpaying for EMI in 2007. Citigroup provided loans for £4 billion acquisition. But EMI proved to be a more difficult challenge than Terra Firma expected. The company needed to inject additional equity into EMI to meet its debt covenants with Citi.

The lawsuit was widely seen as a last-ditch effort by Terra Firma to retain ownership of EMI. Citi took over ownership of EMI in February 2011. EMI's debt was reduced by 65% from £3.4 billion to £1.2 billion in a debt-for-equity swap.

Here's What The Verdict Means For Terra Firma, EMI

Now with EMI split into two - recorded music assets with Universal Music Group, publishing assets with a consortium led by Sony/ATV - Terra Firma would be able to get back some of the money it lost on the deal.

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