Citigroup Gets Into the Music Business by Yanking EMI Out of Guy Hands's Hands
And now it’s official: Citigroup has finally yanked EMI Group away from Guy Hands and his Terra Firma private equity group. The bank, which financed Hands’s purchase of the music label, has been hovering around the troubled company for some time, and when Hands lost his last-ditch lawsuit against the bank last November, this became more or less a done deal.
And yes, it’s slightly jarring to have a giant Wall Street bank holding the keys to one of the world’s biggest music companies, which also happens to be the home of the Beatles.
But that’s going to be a temporary situation: The only question is, who will end up buying the company from EMI, and whether they take the whole thing or split it into parts.
Warner Music Group has been trying to link up with EMI for years, but Universal Music Group and Sony, the two other big music labels, could conceivably bid on at least a portion of EMI. So could KKR and Bertelsmann’s BMG.
Meanwhile if you’re a buyer–or non-buyer–of EMI’s music, nothing’s going to change in the near term. The deals EMI has with Apple, Amazon and the remaining physical music retailers will remain in place. I’m curious to find out if EMI and Spotify inked their U.S. distribution deal before Citigroup took back the keys; I’ll update if I get an answer.