Wormsley: EMI investment not my fault

Citi banker David Wormsley was on the witness stand Wednesday, where he denied all allegations of misleading Guy Hands into overpaying for EMI in 2007.

Citi banker David Wormsley denied all allegations in court Wednesday that he misled Guy Hands into bidding £2.65 per share for troubled record company EMI. 

Wormsley testified he never told Hands anything regarding whether Cerberus would be placing a bid.

“I played a very junior role in this transaction,” Wormsley said. 
Wormsley was excluded from being a “participant” in the auction for EMI by Terra Firma’s general counsel, he said, and his involvement was limited primarily to matters related to the firm’s efforts to find financing for the EMI deal.

Terra Firma is suing Citi, claiming it overpaid for EMI because Wormsley lied to Hands during a series of conversations in May 2007 that Cerberus Capital Management was still bidding for EMI, when the firm had already dropped out of the bidding.

The firm has no physical proof that Wormsley in fact lied to Hands, meaning the case rests on Terra Firma attorney David Boies' ability to convince the nine-member jury that Wormsley is a liar.

Terra Firma could be awarded as much as £7 billion if the jury finds Wormsley guilty of deceiving his longtime colleague. 
During testimony Wednesday, Wormsley said he had known Hands very well since meeting him in 1997, that they were longtime friends, and that he thought a mutual trust existed between the two of them.

Wormsley spoke in depth about his social interactions with Hands, describing a trip to the opera the two men made with their wives, as well as lavish invitations extended to Wormsley by Hands to hunting and other shooting events at Hands’ home in Italy and in the UK.    

While Wormsley spoke highly of Hands’ unique private equity transaction skills, calling him a “contrarian”, he also characterised Hands as worried about a sour deal for EMI affecting his personal reputation.

“He thinks outside the box,” Wormsley said. “He’s also got a big ego.”