Hands had instant buyer’s remorse

Guy Hands’ blockbuster purchase of music label EMI began to spin off track mere months after the private-equity boss finalized the $6.7 billion deal back in the summer of 2007, according to court testimony yesterday.

Citigroup banker David Wormsley told the Manhattan federal court jury that Hands had regrets that the acquisition was going to prove a bust shortly after it was inked in August of that year because aspects of the British company’s recorded music business were performing surprisingly poor.

“Did there ever come a time when Mr. Hands confided in you in respect to the purchase of EMI?” Citi lawyer Ted Wells asked Wormsley.

“Yes,” the banker replied, saying Hands told him he was worried that what he found when he got in there wasn’t what he expected to find while he was sizing up the company.

Wormsley’s statements came during his last day of testimony in which he said that Hands constantly “complained [that Citi was] nickel and diming” him and he was being crushed by the terms of the $4 billion loan Hands’ Terra Firma arranged with Citi to purchase the music publishing enterprise EMI.

In one e-mail exchange on Nov. 21, 2007, Wormsley described the relationship between Hands and Citi around the financing as “pretty hostile.”

“Expect fireworks from Guy in the coming week,” Wormsley e-mailed one high-level Citi official.

“The truth is we funded a poor business too aggressively,” Wormsley wrote.

Terra Firma’s $8.1 billion legal suit hinges on allegations that Wormsley duped Hands’ firm into making a purchase of the troubled music company by claiming that rival bidder Cerberus planned on placing a 262 pence ($5.24 a share) bid for the company in 2007.

Terra Firma then placed its winning 265 pence bid.

Wormsley yesterday adamantly denied that he ever misled Hands or provided guidance to him on what price or time to bid for EMI.

The trial is expected to wrap up late next week.