How Hands got the money

HANDS’ HARD SELL: How did Guy Hands manage to persuade enough investors in the 2007 Terra Firma acquisition of EMI to cough up the $156m needed to keep the company out of Citi’s grasp for the next 10 months? He did it with a big, fat goose egg, notes the Wall Street Journal’s Dana Cimillica. Terra Firma had already written down the value of its EMI investment to zero. That meant investors in the funds that bought EMI, largely a collection of U.S. and Canadian pension funds, faced the prospect of losing all their money if they refused to back the capital increase. By agreeing to put up new cash, they may be able to salvage some of their original investment. In other words, it was a strong arm they couldn’t refuse. (5/12a)