The Daily Swarm

Evening Standard (print edition only):

CITY SPY; HANDS MAKES A BIG NOISE ON EMI SHAKE-UP
29 May 2008

MESSAGE to Guy Hands: if you’re going to try to woo a leading chief executive, do it where you can’t be heard. There’s a chap.

The peace of breakfast at the Baglioni Hotel was shattered the other morning by the Terra Firma boss telling Marcello Bottoli from the Samsonite luggage firm just what his plans are for EMI, the record company he bought last year.

City Spy, of course, had to eat his boiled egg and soldiers more slowly than usual as Hands held forth. It seems, having paid a whopping £3.2 billion for the label at a time when CD sales were heading south, the private-equity magnate is open to offers to split the business, and is considering selling off the recorded music arm. This would leave him with the lucrative publishing side. Warner Music, Universal or Sony could be likely buyers.

CITY Spy had to order more toast and marmalade as Hands went on. He may move the US headquarters of the label from East Coast to West. He rated some but not all of the old brigade he’d inherited at EMI head office just up the road from the hotel (step forward Chris Kennedy, the chief financial officer – you’ve got a gold star). Lord Birt, his adviser and former BBC director-general, has told him it took a decade to turn round the BBC, and EMI represents a similar challenge.

EXTRA coffee came City Spy’s way as Hands explained how he is still seeking a CEO nine months after Eric Nicoli’s exit. Headhunters have taken on the task, and Hands believes whoever gets the job should be seen to run the music company separately from Terra Firma. Bottoli listened but alas, did not appear to bite off Hands’ hand, as it were.

LATER, City Spy called Terra Firma and ran through the points of Breakfast at Baglioni’s. A spokesman declined to comment.

NY Post:

Terra Firma boss Guy Hands wants to help Citigroup rid itself of the $4.9 billion in EMI debt stuck on its books.

In his quarterly address to shareholders, Hands, head of the British private-equity firm that bought the music giant last year, said that Terra Firma remains on the hunt for takers to help reduce Citi’s exposure to the loan.

“In all leveraged buyouts, your bank is your partner, and we have worked hard, and continue to work hard, to see if there are ways to help Citigroup syndicate or sell down this loan,” he said, acknowledging publicly for the first time that “the [banking] crisis has been so deep that the debt package has had to remain on the balance sheet of the bank which provided it.”

While Citi’s struggles to off-load the EMI debt is a problem endemic to many financial institutions being rocked by the credit crunch, it is rare for a client to pitch in to help find a buyer.