Guy Hands conceded in a London court that his reputation was severely tarnished by the disastrous £4.2bn debt-fuelled takeover of EMI and admitted that his legal battle against the US bank was more likely to be beneficial in repairing the €200m damage to his finances than in restoring his standing in the City.
But now, after he has withdrawn his claim against Citi, the financial hole will get larger. He faces a multimillion-pound bill to repay the US bank’s legal costs after withdrawing a legal claim over the takeover of the music group.
The EMI deal, clinched just as the credit crunch took the wind out of the decade’s debt-fuelled acquisitions spree, had been a rare blemish on the career of a 56-year-old who is so severely dyslexic that the judge heard that he reads using a blocked colour system he has been using since he was nine or 10.
Educated at Oxford, Hands began his career at Goldman Sachs before joining Japanese bank Nomura – where he earned his reputation as a dealmaker by buying rolling stock company Angel Trains – and which eventually led to the creation of his private equity firm Terra Firma in 2002.
Hands moved the investment house, which owns businesses as diverse as Odeon and UCI cinemas and Wyevale Garden Centres, to Guernsey for tax reasons in 2009. Four years ago, Terra Firma bought Four Seasons care homes – a business in an industry facing severe pressure – while the longest running investment, dating back to 1996, is Annington, which leases more than 40,000 homes to the Ministry of Defence.
The court also heard about a meeting held in one of the series of upmarket hotels run by his wife Julia, with whom he has four children.
In court, Citi’s lawyer Mark Howard had said Hands had been described as an investor with “magic sauce”, with a reputation for cutting costs and securitising – borrowing against income streams generated by the business – and being a good negotiator.
They are skills he will need after Friday’s events in court.
