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Terra Firma broker Dresdner Kleinwort and EMI broker Deutsche were today still contacting shareholders in a last minute bid to round-up any outstanding acceptances, said a deal source.
It is understood that Terra Firma and Citigroup are not currently in talks over the terms of Citigroup’s financing of the offer, and that Citigroup will push for talks if the 90% threshold is not reached by the 1pm Wednesday deadline.
It was suggested that if Terra Firma hits the magic 90% figure, then there will be an announcement on Wednesday evening or very early on Thursday to update the market. If this is the case, then Citigroup is legally bound to provide financing at the terms initially agreed. Citigroup’s insistence on the 90% condition comes in light of increasingly difficult conditions in the credit markets. It is understood that Citigroup has had difficulty in finding secondary buyers for the GBP 2.5bn of debt, and may have to shoulder more than it initially anticipated.
If Terra Firma achieves anything less than 90% then Citigroup will seek a meeting to discuss the terms of the financing and will not automatically waive the condition as has been suggested in some quarters, it is understood.
Therefore, if Terra Firma declines to inform the market of acceptances swiftly after 1pm Wednesday, this could be an indicator that the threshold has not been reached and the two sides are again locked in negotiations, it was said.
It was pointed out that the decision to extend the deadline for acceptances from Sunday 29 July to Wednesday 1 August was made by the panel at the request of Terra Firma without the support of Citigroup. “Citigroup were aware of it but not consulted,” it was said. It is also understood that Terra Firma is not planning to seek a further extension from the panel.
Asked whether there was any indication that the 90% would be reached, one person familiar with the situation said: “There was a lot of trading towards the end of last week which was not reflected in Sunday’s total.”
As of Sunday, Terra Firma had received acceptances from 84.94% of EMI’s shareholders.
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