UPDATE 1-Citigroup banker denies giving EMI bid detail

* One man’s word against another at New York trial

* High stakes for Terra Firma-owned EMI and Citigroup

* Banker spends second full day on witness stand
(Adds banker says Hands confided in him about soured deal)

By Grant McCool

NEW YORK, Oct 27 (BestGrowthStock) – Citigroup Inc (C.N: ) banker
David Wormsley denied on Wednesday giving bid details for EMI
to Terra Firma buyout house chief Guy Hands, who accuses the
banker of lies that led him to pay too much for the music
company in 2007.

Under questioning in U.S. District Court by Citigroup’s
trial lawyer, Wormsley repeatedly answered “No” when asked if
he had told Hands on a May 2007 weekend that rival Cerberus
Capital Management LP would bid at 262 pence per share;
anything about a Cerberus bid; or that Terra Firma should bid
at 265 pence.

Wormsley, 50, told the jury of nine New Yorkers that later
in 2007 and in 2008, Hands confided in him about the souring of
his 4 billion pounds ($6.4 billion) EMI deal. The acquisition
has become a symbol of some of the worst aspects of the credit
boom and bust as EMI sags under the weight of its debt.

“The combination of what he found (at EMI) and the collapse
of the debt markets in the interim period, I think he was
worried,” the soft-spoken Wormsley, wearing a navy blue suit,
light blue shirt and red tie, said on his second full day on
the witness stand.

He said Hands appeared to be worried about losing money and
damaging the successful reputation of the Terra Firma private
equity firm he founded in 2002.

The two Englishmen had been friends and business associates
since 1997 until Hands sued in December 2009. Throughout the
trial so far, they appear to have avoided eye contact while
sitting just feet away from each other.

Wormsley testified on Tuesday he could not remember
specifics of any of the telephone calls at the heart of the
civil fraud case brought by Terra Firma over its purchase of
EMI. [ID:nN26172590]

The trial pitting Hands’ word against Wormsley’s centers
around those conversations in the days leading up to the EMI
bid deadline of May 21, 2007. Hands, 51, testified last week
that he made the high bid only because the banker and friend he
trusted lied to him about another offer he had to beat

Terra Firma is seeking as much as $8 billion in damages for
its fraud claim at the trial, which started on Oct. 18 and is
expected to end on Nov. 5.

If Terra Firma lost at trial, it could be forced to hand
over EMI to Citigroup, which provided 2.6 billion pounds ($4
billion) in loans for the acquisition.

The bank’s reputation for facilitating such deals could
suffer if the jury decided that Hands had been defrauded.

“I played a very junior role in this transaction,” Wormsley
testified on Wednesday.

The bank had been advising EMI on the sell side of the deal
and had ties to both Terra Firma and Cerberus private equity
firms. Wormsley told the court he was asked not to negotiate
with Hands or any potential bidders.

Jurors heard on Wednesday that the two men and their wives
attended dinner and a performance at the Royal Opera House in
London in June 2008, nearly a year after the August 2007
closing of the EMI deal.

Wormsley confirmed he was invited to Terra Firma’s annual
clay pigeon shooting event in the Berkshire countryside in 2007
and 2008. He was invited to a pheasant shooting event at
Hands’s villa in Italy in January 2008, which he could not
attend because of the illness of one of his three children.

The case is Terra Firma et al v Citigroup et al, U.S.
District Court for the Southern District of New York, No.
($1 = 0.6364 pound)
(Reporting by Grant McCool; editing by Gerald E. McCormick
and Andre Grenon)

UPDATE 1-Citigroup banker denies giving EMI bid detail