Archive for February, 2006

Sir Nigel Rudd set for triple takeover record

February 27, 2006


Sir Nigel Rudd is in the throes of achieving some kind of big business records.

One of Britain’s professional non-executive chairmen, he is currently involved in three headline making takeover deals.

Takeover No 1:  glass makers Pilkington about to be taken over by Nippon Sheet Glass of Japan in a £1.8 billion deal. Sir Nigel is due to collect  a windfall of £4 million when he gives up the chairmanship.

Takeover No 2:  Pendragon, also chaired by Sir Nigel, is about to take control of the rival car dealer Reg Vardy.

Takeover No 3: Boots, the retailer where Sir Nigel is also chairman, has agreed a merger with Alliance UniChem.

Nigel Rudd was born in Derby in 1946. His early years were ones of genteel poverty and – surprisingly for those who know him now – great shyness.

He qualified as Britain’s youngest chartered accountant and after a short period as a company troubleshooter he became an entrepreneur, buying a small house-building company for £10,000 and making a £600,000 fortune from property deals by the time he was 36.

Instead of opting for the easy life, he and his partner bought Williams. He made his name – and a tremendous fortune – by aggressively building Williams into a conglomerate during the 80s. In 1991 Williams was demerged into Chubb and Kidde.

His presence in boardrooms became a reassurance for City analysts concerned about poor management. In 1994 he became chairman of East Midlands Electricity, where he is credited as the architect of the dramatic culture change. In 1995 he became non-executive chairman of Pilkington, the world famous glass company.

Knighted in 1996, he has since become a non-executive power player in the boardroom of many FTSE 100 companies

What his colleagues value is his ability to get straight to the heart of the matter. He is not distracted by peripheral issues. One of his greatest strengths is his ability to generate – and share – his vision. He leaves the implementation to others.

What he values is his ability to understand structure and – perhaps even more importantly – to understand people. ‘I’m very good with people,’ he says, ‘As a chairman you wander round and you just know how someone is reacting’ ‘People tell me things.’!

Thanks for reading Big Business

David Davis


Defender of Tesco’s success

February 27, 2006


When the chief executive has to defend his company in public it is usually to calm angry shareholders about poor results or in a takeover battle. Yesterday Sir Terry Leahy found himself on BBC radio defending Tesco’s success!

In his normal tough and blunt style he was up for the task strongly making the point  that Tesco had to “strike a balance” between helping families to shop on a tight budget and providing a return to shareholders by maximising sales and profits.

Sir Terry is the ultimate ‘one company’ man. He joined Tesco straight after graduating from the University of Manchester Institute of Science and Technology (UMIST) in 1979. He started  as a marketing executive, was appointed to Tesco’s board of directors in 1992, and by the time he was 40 he had worked his way up to become chief executive in 1997.

On his watch the now 48-year-old supermarket boss, Tesco is the dominant force in the UK with at least one in every £8 spent with a retailer now ends up in Sir Terry’s coffers.

By acquisition he has built up the Tesco Express chain of convenience stores and he has created the most profitable online shopping business.

Internationally, Tesco now has a presence in 11 markets in Ireland, Eastern Europe and Asia and recently announced plans to open stores in the United States.

Sir Terry was knighted in 2002, soon after having received the honour of the Freedom of the City of Liverpool which entitles him, amongst other things, to herd his sheep across the city without being arrested.

Quite an honour for a local boy who, according to Liverpool Post “grew up in a pre-fab maisonette on Endbrook road in the Lee Park council estate in Belle Vale”.

Thanks for reading Big Business

David Davis


Apax powers on without Sir Ronald

February 26, 2006

Ronald Cohen.jpg

Whenever there is a deal around you can be sure to find Apax Partners, the private equity investment group somewhere in the mix.

This week there is speculation that it is about to bid £300 million plus for the House of Fraser department store group which for Apax, with investments in more than 300 companies across its chosen sectors of information technology; telecommunications; media; healthcare; financial services and retail and consumer products, it is simply business as usual.

Other than size and numbers of deals, nothing has really changed since 1972 when Egyptian-born Ronald Cohen, then age 26 and three Harvard Business School classes founded a consulting firm to advise entrepreneurs. Without knowing it they had sown the seeds of the venture capital business in Europe.

England at the time was known as the “sick man” of Europe and in an ominous sign of the times the day after Cohen launched what was to become known as Apax Partners, a bitter coal miners’ strike forced the British government to declare a state of emergency and place businesses on a three day work week to conserve energy.

Later Cohen joined forces with Alan Patriof, a New York financier, the firm flourished in the go-go 90s and the rest of the Apax success story is now part of history… it has been associated with such companies as Computacenter, Dr Solomon’s, Virgin Radio, Waterstone’s, Autonomy, Demon Internet, Dialog Semiconductor, Esprit Telecom and Arc International in the UK; Kamps, Nordsee and Tank und Rast in Germany; Nicox, Sephora and Aigle in France; Compugen and Fundtech in Israel and Apple Computers, America Online and Cellular Communications Inc. in the USA.

The Apax group advises funds totaling $12 billion around the world and has offices in London, New York, Menlo Park, Madrid, Milan, Munich, Stockholm, Tel Aviv, Zurich, Hong Kong and Paris.

In 2001 he was knighted for services to venture capitalism and last July Sir Ronald stepped down from executive chairman to concentrate his time on what he calls ‘social investing’ but as the headlines will show this week Apax has lost none of its zest for business.

Thanks for reading Big Business

David Davis


Putera Sampoerna takes a £115 million punt at Les Ambassadeurs

February 25, 2006


When you are already wealthy and then sell the family business for $5.2 billion, there is very little that money can’t buy.  That’s what 56 year old Putera Sampoerna is discovering.

The family fortune was built on palm oil and rubber plantations in Malaysia which young Mr Sampoerna ran for 10 years after returning in 1970 from the US where he studied at the University of Houston.

Then he went to work in the family’s tobacco business which he took over from his father in 1986 and since the elder Sampoerna’s death in 1994, Putera has been trying to professionalize his empire, bringing in executives from Singapore, Taiwan, the U.S., Korea and Indonesia.

He has built up a large portfolio of businesses in food, cars, watches and he has also dabbled in telecoms.

He was listed as Indonesia’s third richest man even before last year when he sold the tobacco business to Philip Morris and has since turned his attention to online sports betting and luxury casinos, which many say are his natural habitats.

Word has it that he is set to buy the leading London casino Les Ambassadeurs for £115 million from London Clubs International and once approved by LCI shareholders, the deal could be announced within the next week or two.

Thanks for reading Big Business

David Davis

Richard Kirk The Kwik Saviour

February 25, 2006


At first meeting Richard Kirk has a five minute credibility gap.  His looks and calm demeanour suggest a Harley Street specialist but then once he starts talking about his passion you realize how much he is at home in the rugged world of High Street discount shopping.

He learned his trade in a hard school, first at Woolworths then 18 years at Iceland, the frozen food speciality group where he rose through the ranks to managing director.

Kirk is a man who relishes a challenge and in 1998 he left Iceland for The Peacock Group, the discount clothing group, whose history goes back to 1884. Within 12 months Kirk led the company’s flotation on to the London Stock Exchange and a dramatic transformation in its fortunes. 

With 55% of the group’s revenue coming from women’s wear, change was inevitable. Bonmarche stores and The Fragrance Shop chains were acquired and a major stores upgrade was got underway. Today the group has more than 425 stores and a work force of 5,000 people.

“If we hadn’t done something we would have been eaten alive” he was reported as saying at the time.

Then at the end of last year Kirk led an audacious successful move to take Peacocks private in a £404 million deal, back by hedge funds.

With that completed early this month, Kirk is back on the deal-making trail and the talk on the City grapevine is that he is set to inject his own money, leading a consortium of private individuals, to take control of about 180 Kwik Save stores and resurrect this troubled brand.

Kirk will become non-executive chairman of Kwik Save but remain committed to running Peacocks on a day to day basis.

Thanks for reading Big Business

David Davis


Sugar ‘more credible tyrant than The Donald’

February 21, 2006


The Alan Sugar story is a real-life rags to riches business story.  From selling cigarette lighters and TV aerials off a barrow in London’s street markets to founding the home electronics group Amstrad in 1986 – the same year he married his wife Ann, Sugar really hasn’t looked back.

At its peak Amstrad achieved a stock market valuation of £1.2 billion but the nineties proved a troubled time.  In 1997 Amstrad divided into Betacom and Viglen and in 2005 his business empire was estimated to be worth £700 million and he was worth 25th on The Times Rich List.

The headlines about Sugar moved from the business pages to the sports pages after he and Terry Venables got together to buy Tottenham Hotspurs in 1991 but he was never really comfortable running a football club and later sold out.

A man with strong family values and a ‘silent’ supporter of many charities Sugar’s life went the full circle when he was knighted in 2000 but it was his entry into the world of reality TV that has put him firmly in the public spotlight.

In the show, which is based on Donald Trump’s successful US show The Apprentice, he shows the tough non-nonsense side of his personality when he tests 14 apprentices and each week he fires one of them.  The one left standing wins a job in his organization.

His performance is now being compared with Donald Trump – the US business tycoon is smooth and confident in front of the cameras, but Sugar wins hands as a more credible tyrant.

It could be the case that the gifted amateur has the edge over the well-honed professional when it comes to speaking in public.

You can see Sugar in his second series which starts tomorrow on BBC 2 – make up your own mind.

Thanks for reading Big Business

David Davis

Billionaire prince to float hotels

February 20, 2006


According to Forbes magazine the 5th richest man in the world is 48, self made, married with 2 children and a net worth of $23.7 billion and counting.

He is Prince Alwaleed Bin Talal, nephew of the Saudi king, who began building his investment portfolio in 1979, when he returned to Saudi Arabia after graduating from college in the United States. 

Initially focusing on construction and real estate. he soon became a successful entrepreneur and an astute global investor and his Kingdom Holding Company today has investments in banking, real estate, telecommunications, broadcasting and media, entertainment, hospitality, computers and electronics, agriculture, restaurants, upscale fashion, retailing, supermarkets, tourism, travel, and automotive manufacturing.

Later this year there will be a rare opportunitiy for investors when he floats one of his investment vehicles, Kingdom Hotel Investments on the stock exchanges in London and Dubai.  KHI owns stakes in 26 hotels including the Savoy in London and the George V in Paris.This will be the first time he has taken a company public and marks a landmark in the career of this extraordinary billionaire.

He is a serial dealmaker. Last year he unloaded his half of New York’s Plaza Hotel and plowed the profits into buying stakes in London’s Savoy Hotel and Monaco’s Monte Carlo Grand. In January he helped bail out an ailing Disneyland-Paris with a $30 million cash injection. A vocal supporter of women’s rights, he hired the first female airplane pilot in Saudi Arabia, a country where women still can’t legally drive.

Clearly pleased with his stock picking prowess, he took out ads on CNN touting his holdings. “We’re telling the market all these companies are number one in their field,” crows Alwaleed.

The prince approaches philanthropic work with the same dedication he gives to his investment activities.  He has financed the construction of over eighty mosques and built electricity generators, wells, roads and bridges throughout the kingdom. 

Prince Alwaleed holds a B.S. in Business Administration from Menlo College and a master’s degree in Social Science from Syracuse University, as well as honorary degrees from the University of New Haven, Kyungwon University in Korea, and Syracuse University. 

Thanks for reading Big Business

David Davis

A Rightmove for Ed Williams

February 16, 2006


Ed Williams, chief executive of the property website Rightmove is hoping that his company’s planned listing on the London Stock Exchange will live up to its name.

On facts and figures alone, it should become investors’ delight. The company has a very simple business model. It charges estate agents a flat £250 a month per office to list any property they want. It’s a great deal when you consider an agent will spend between £2,000 and £5,000 a month on colour advertising in the local press.

Rightmove’s website had 4.5 million unique visitors in January, double the figure a year ago. The number of pages accessed was a remarkable 340 million, and already the company is wondering if there can really be many more people looking for homes out there.

Look at cost and circulation, and online has rapidly become a cheap way for classified advertisers to reach large numbers of consumers.

When the company, which last year produced profits of £8.7 million on revenues of £18.2 million, comes to market it will have a price tag of around £300 million, producing multi million pound windfalls for the main investors the estate agent groups of Countrywide, Halifax, and Connells,and the Royal & SunAlliance.

Ed, a former business strategy and IT consultant, with McKinsey & Co, Accenture and JP Morgan,  will also be considerably better off. He joined Rightmove in 2000 as Managing Director, shortly after it was set up and one of his first tasks to form the senior management team which remains in place through to today.

Now that the website business has such a dominance in the property listings market, the plan is for Rightmove to become a broadly based residential property services group, particularly a major player in the market for Home Information Packs that all sellers will have to complete next year.

Thanks for reading Big Business

David Davis


Mandarin in Channel Tunnel bid

February 15, 2006


If you want to know what it takes to become what the press calls a Treasury mandarin look no further than the background of Sir Adrian Montague who, according to reports today, is teaming up with Goldman Sachs to bid for London & Continental Railways, the company that runs the Channel Tunnel Rail Link and co-owns Eurostar.

He started the rise to public attention as a partner with the establishment law firm Linklaters & Paines and later moved into investment banking to become global head of Project Finance for Dresdner Kleinwort Benson,

He was, as they say ‘spotted’ and from 1997 to 2001, he held senior positions concerned with the implementation of the Governments strategy for involving the private sector in the delivery of public services, first as Chief Executive of the Treasury Taskforce, and then as Deputy Chairman of Partnerships UK plc.

He played a leading role in the creation and financing of Network Rail and in the restructuring of British Energy and also led the government’s review of Crossrail, the project to build an east-west rail link under the centre of London.

Aged 58 at the end of this month, Sir Adrian (awarded a CBE in 2001 and knighted this year) is current ly chairman of British Energy and chairman of insurance group Friends Provident……he is also Chancellor Gordon Brown’s favourite economic adviser.

Thanks for reading Big Business

David Davis


Mike Lazaridis facing new BlackBerry rivals

February 14, 2006


Microsoft and Vodafone announced today that they have joined forces to launch a portable email service that intends to rival market leader Blackberry. The service will be available in the UK, France and Germany next month and comes as Blackberry-maker Research In Motion (RIM) fights the possibility of a forced shutdown in the US in a legal fight with US software business NTP, which is arguing Blackberry has breached its patents.

This is just another battle for Mike Lazaridis, former drop-out university student and founder of RIM in 1984, making billions of dollars along the way with its BlacBerry, a handheld gadget for writing and receiving secure e-mail. It swept government and business communities around the world and today is used by more than 3 million people.

The BlackBerry has become the corporate equivalent of the iPod, an ubiquitous business tool, which has pushed the company’s capitalization to over $14 billion.

But with success has come envy – and plenty of imitators. While RIM has enjoyed being the default choice for mobile email, its competition is becoming a whole lot fiercer and the move by Microsoft and Vodafone is the most serious so far.

RIM has said that it had developed a software patch that would enable it to maintain its service in the US even if it loses a forthcoming court patent ruling.

But given these storm clouds, Lazaridis, 44-yer-old teddy bear of a man, is remarkably sanguine about the threat to his company. “There’s a massive amount of work that went into the BlackBerry; the whole concept of a ‘push’ technology was different. And we built in security from the beginning. Competitors aren’t going to find that mobile email is something they can just do,”

And while competitors have still to demonstrate they can match BlackBerry’s  level of security, Lazaridis has his eyes fixed on new markets. “We’ve been doing mobile email for five years now. Now we can take that further. We can connect into corporate data, access back-end systems.”

Thanks for reading Big Business

David Davis