EMI Seizure Cost Citi £1.4 Million

In the seven weeks before it seized control of EMI, U.S. banker Citigroup spent more than £1.4 million on accountants and legal advice.

Documents filed to Companies House show PricewaterhouseCoopers billed Citigroup for £1.4 million of “pre-administration costs” between Dec. 12 and Jan. 31.

The following day the costs will likely have risen as Citi instructed PwC to put Maltby Investments, EMI’s holding company, into administration on Feb. 1.

A report in the London Evening Standard said Citigroup secretly hired PwC in December, shortly after EMI chief Guy Hands lost his high-profile lawsuit against the U.S. bank, thereby that the first he heard about it was after he lost control of the label.

The PwC team led by Peter Spratt and Tony Lomas defended its fees, saying it “achieved a greater realisation than would have been likely under any insolvency procedure.”

The accountants reckon EMI has an enterprise value of £1.95 billion, far below the £4.2 billion that Hands paid in 2007. Most UK business analysts believe EMI would currently fetch about $2.5 billion (or £1.53 billion), but recent news reports suggest that Citi is in no hurry to make a deal.

Citigroup would prefer to sell EMI as a whole business, according to The Guardian, rather than sell its publishing and recording divisions separately.