Hands takes EMI(3)

Guy Hands’ Terra Firma has won the 90 percent shareholder acceptance needed to secure EMI.

UK buyout firm Terra Firma has secured the necessary 90 percent acceptance needed in its £2.4 billion ($4.8 billion, €3.6 billion) bid for music group EMI, according to a statement.

Guy Hands’ buyout firm has secured 90.3 percent acceptance from shareholders. Today’s result had been widely expected since Terra Firma reported it had nearly 85 percent acceptance on Friday. But Friday’s news came after a troubled bidding process for the company.

Firstly, trade buyer Warner Music had mulled a bid for the company and was widely expected to come into the bidding, according to sources close to the company. However, the bid never materialised.

Media sources then speculated the buyout firm would be denied funding by US bank Citi if it failed to reach the necessary 90 percent shareholder acceptance rate. In such situations underwriting banks would usually agree to change the offer terms. But due to uncertainty caused by problems in the debt markets the media has questioned Citi’s willingness to do so.

A source close to Terra Firma said: “Citi have made huge amounts of money from Terra Firma and EMI over the years. They always waived the shareholder acceptance rate in the past.”

Such speculation is now academic, as Terra Firma will look to turn around the music group, which has suffered from the weak performance of the recorded music industry generally.