Hands' lawyer: Citi banker has loose lips

Citi banker David Wormsley took the witness stand Monday as Terra Firma’s trial against Citi entered its second week, and was subjected to intense questioning designed to show he had no qualms about disclosing sensitive deal information.

David Boies, the attorney representing Terra Firma, displayed an email from 18 June 2007 from Wormsley to Terra Firma head Guy Hands disclosing information about the Cinven buyout of UK healthcare company BUPA for £1.4 billion. Citi had advised BUPA on the deal.

The email revealed supposed “confidential” information, according to Boies, that UK-based private equity firm CVC came second in the auction with a bid that was “£30 million” lower than Cinven. The email also said the other bidders in the auction were BC Partners, Terra Firma and Blackstone. The other firms “were all some way behind”, the email said.

Wormsley defended the email, testifying that he got approval from “the BUPA team” before sharing the bid information. Private equity bidders are not shy about their bids once a deal is closed, Wormsley said.

“It’s information that's very easy to get hold of,” Wormsley said. A source close to Citi said on the sidelines at the trial the information was not confidential.

Boies appeared to be attacking Wormsley’s business ethics in an attempt to undermine his character to the jury. Boies’ ultimate goal is to convince the jury that Wormsley is prone to lying.

Terra Firma has accused Wormsley of lying that Cerberus Capital Management was still bidding for struggling music publisher EMI in 2007, when the firm had already dropped out of the bidding. Wormsley’s lie led Terra Firm to bid too much – £2.65 per share – in its £4 billion buyout of EMI, the firm alleges.

Terra Firma could be awarded up to £7 billion in damages if it wins the case. But the case hinges on one side or the other convincing the nine-member jury their client is honest.

Last week, Citi attorney Theodore Wells spent several days grilling Hands about his failure to remember details of important Terra Firma meetings about the EMI acquisition. He repeatedly asked for any kind of documentation of Wormsley telling Hands days before the bid deadline that Cerberus was in the auction with a bid of £2.62 per share.

Hands shot back Monday that he has never kept notes because of learning disabilities dyslexia and dyspraxia he has suffered his whole life.

“My writing both has very, very bad spelling and it's pretty well illegible. I can't even read my own writing after a few hours so there's really not much point in me making notes,” Hands said. “Even when I was at university, I didn't keep notes.”

Hands also revealed Monday the EMI investment caused Terra Firma to miss some attractive deals after the financial markets crashed in 2008 and discounts were abundant.

“We were very much on the sideline during that period. What happened that period was the market came down considerably and then started to recover, so there were bargains available if one had been active at that time,” Hands said.

Wormsley will be back on the witness stand Tuesday.