LONDON (Dow Jones)--Terra Firma Capital Partners Ltd., the private equityfirm, could become the owner of EMI Group PLC (EMIPY) this week, as it standspoised to secure the 90% shareholder approval required by Citigroup Inc. (C),its financial backer, for it to commit more than GBP2 billion in funding to thedeal.
The paper quoted unnamed sources as saying that despite having been forced toseek an eleventh-hour extension from the Takeover Panel on Saturday, TerraFirma, which is owned and run by Guy Hands, was well placed to succeed in its GBP2.4 billion bid for The Beatles' record label.
However, the deal will have come at a price, because the long-standingrelationship between Terra Firma and Citigroup , already strained after the banksought to renegotiate terms for the deal last week, was further tested over theweekend, the paper said.
Citigroup demanded that a full 90% shareholder acceptance for the 265 pence-a-share bid be secured before it would approve funding - well above the usual 75%asked for by financial backers. Last week, it emerged that Citigroup wouldn'tagree to a waiver if Terra Firma came close by securing even as much as 80%approval.
Citigroup's hardline stance has underlined nervousness on Wall Street ascredit markets dry up amid the problems gripping the U.S. sub-prime mortgagemarket.
On Saturday, as counting of shareholder acceptances threatened to go down tothe wire - approvals were at 84.94%, at 5 P.M. Terra Firma decided that itcouldn't count on a waiver from Citigroup . It won an extension for its bid fromthe Takeover Panel until 1 P.M., Wednesday.
The paper said that on Sunday, sources close to the EMI bid said that TerraFirma had decided not to seek a formal waiver from Citigroup over the weekend.The paper quoted one source as saying that the bank had given "no opinion" wheninformed of the extension to the Takeover Panel deadline.
It said the source suggested that Terra Firma had fallen short of 90%acceptance because some shares couldn't be tendered in time, having been boughtafter a trading frenzy on Thursday. Market rules meant that these could not betendered for sale for three days. The source quoted the paper as saying: "TerraFirma are all but there."
Newspaper Web site: http://www.timesonline.co.uk
-London Bureau, Dow Jones Newswires; +44 (0)20 7842 9320
(END) Dow Jones Newswires 07-30-07 0213ET Copyright (c) 2007 Dow Jones & Company, Inc.
