Archive for the ‘Deals’ Category

Who’s gambling on The Sportsman?

April 1, 2006

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L/R Jeremy Deedes, Max Aitken, Ben & Zac Goldsmith

An amusing £2 million television advertising campaign for The Sportsman, is attracting more attention than Britain’s latest daily newspaper it is advertising.  The ads show a bookmaker refusing to allow a customer to place a bet because he is carrying a copy of The Sportsman.

But this will not be too much of a concern for the group of investors in Sports Betting Media Ltd, who are gambling £11.5 million on the paper's launch because they expect to make a killing not from newsstand sales but from the dramatic growth of the £40 billion a year Internet sports betting.

The investors are a motley crew and include the former Telegraph Newspapers chief executive, Jeremy Deedes, who is chairman of SBM;  Max Aitken, the 28-year-old great grandson of Lord Beaverbrook, creator of the Express newspaper group, and the Sportsman's managing director; Ben and Zac Goldsmith, sons of the late Sir James Goldsmith, the controversial financier; a syndicate led by Ben Arbib, son of the city financier Sir Martyn Arbib; James Osbourne, managing director of Aspinall’s and property tycoon Martin Myers.

When fully up and running The Sportman’s website will carry links to online bookmakers and gambling sites in return for a share of the revenues made from readers clicking through to place their bets.

The first test will be the World Cup in June which is expected to be the biggest sports betting event ever.

I know who I would put my money on.

Thanks for reading Big Business

David Davis .


Bernie & Max – Formula One’s Odd Couple

March 29, 2006


Give Bernie Ecclestone (right) due credit…..he knows how to eat his cake and keep it.

He has sold for an undisclosed sum the commercial rights of Formula One motor racing to private equity firm CVC Partners after months of negotiations but stays one as chief executive and a shareholder to further build the business.

Where that leaves Max Mosley,(left) the other half of Formula One's Odd Couple, remail unclear.

What is more certain is that at 75, and after more than 30 years Ecclestone is finally loosening the stranglehold on the business he created and which has given him and his wife Slavica wealth running into billions of pounds.

Not bad going for the Suffolk trawler skipper’s son  who left school at 15;  although he ultimately got a chemical engineering degree from Woolwich Polytechnic, even as a teenager he was competing in motorsports, both on motorcycles and eventually racing a 500cc Formula 3 Cooper on a regular basis until an accident ended his career in 1951.

He went into team management and eventually took over the whole of F1. A bond issue in 1999 and the sale of 75% of the business a year later netted Ecclestone £1.9 billion. That money was transferred to Jersey-based trusts controlled by  Slavica. But when German media giant Kirch, which had bought the 75% stake, went bust, its bankers took the shares. A court battle followed because they wanted thei money back and it has never been clear.

According to the Sunday Times, whatever happens, Ecclestone has some choice assets to enjoy, including a £75m yacht, a £12m jet, a £5m London home and his own hotel and chalet at Gstaad. BusinessF1 magazine valued him at £2.323 billion in late 2003.

Where the new deal leaves Max Mosley,  Ecclestone’s “other half” is equally unclear but you can be certain he will be in the winner’s enclosure.

From their resumes, you would not have predicted Bernie and Max as a match made in heaven.

Max, in his university days, was secretary of the prestigious Oxford Union and became a respected lawyer before venturing into Formula One. Like Bernie, Max also dabbled as a driver in Formula 2 and as a club racer. Max also came from a storied family in the British aristocracy: his father was  Sir Oswald Mosley the British Fascist leader of the 1930's mother was Diana Mitford, sister of Nancy Mitford, the writer.

The Odd Couple have been linked since the early 1980’s when they and the constructors formed a group called the Formula One Constructor's Association (FOCA) to fight a  common enemy: the Federation Internationale du Sport Automobile (FISA), the governing body of Formula One that was forerunner of what is now the Federation Internationale de l'Autombile (FIA).

The so-called FISA/FOCA War: was for control of  the commercial and promotional rights to Formula One racing. Eventually after some very public squabbling a deal was struck. 

Max went on to run the FIA where he is currently in his fourth term as president so his umbilical cord with Bernie remains unbroken for the foreseeable future.

Thanks for reading Big Business.

David Davis

The Quiet “Professor” is Macquarie’s Mastermind

March 28, 2006


The Bloomberg News Service carried a piece yesterday about Macquarie Bank and it is certainly worth reading. 

It doesn’t, however, tell you much about the man who has masterminded the bank’s rise from virtual obscurity to a global financial powerhouse and which recently made an audacious bid to take over the 300 year old London Stock Exchange.

So let me fill in some CV detail of Allan E Moss, who is 57 and has been Chief Executive of Macquarie since August 1993.

According to colleagues, he is quiet, balding and bespectacled –  something of a bumbling professor – tripping over phone wires, spilling cups of coffee and falling off desks.

"He's no Donald Trump," quips one senior executive. But what he lacks in social graces,  Moss more than makes up for in financial nous. With a small top team, it he has been the adrenaline that has driven Macquarie's global expansion.

Educated at the University of Sydney and later at Harvard Business School, his early work was with the Australian Industrial Development Corporation but the bureaucracy didn’t suit Moss and he returned to the world of academia.

Then, nearly 30 years ago, he joined the local fledgling operations of Hill Samuel, the UK merchant bank from which Macquarie has emerged.  He, in fact, led the team responsible for preparing the submission to the Australian Government for the formation of the bank.  After moving up the managerial ladder he became Chief Executive in 1993 – and from then on, there has been no stopping the bank’s march to the top. 

Hardly a day goes by when Macquarie is not making another deal, mainly the acquisition of public utilities, among them a string of airports from Brussels to Rome to Hainan Island, China;  roads and bridges across Australia, Europe, Asia and North America, including the Chicago Skyway, a 7.8 mile elevated highway and the Indiana Tollway. 

The failure to acquire LSE was a rare setback for Moss's global ambitions but nonetheless Macquarie is now Australia's only independent, full-service investment bank operating in 23 countries

Despite its growth in recent years, Macquarie has been able to retain an entrepreneurial, decentralised culture, according to analysts and rivals. Moss is credited with nurturing this, at the expense of his own profile. He and his wife, Irene, who until a year or so ago was commissioner at the ICAC, Australia's anti-corruption watchdog, lead singularly career-focused lives.

With a pay packet of $30 million over the past five years, he is now reputedly one of Australia’s richest men – he has a private stake in the Gold Coast Airport and quite a taste for waterfront property.

But he is generally less conspicuous when it comes to spending it. While his investment banking peers drive sports cars with personalised number plates, Moss drives a regulation-issue Mercedes-Benz. He is almost totally absent from Sydney's furious, money-driven social scene.

His wife, it appears, is his constant companion. He met fellow arts/law student Irene Chee over a photocopier and later they sat next to each other in class. Together they decided to tackle the American Ivy League institution, Harvard; he a master's of business administration, she a master's in tax law.

Three decades on, Allan and Irene Moss spend the first part of the day together, getting in an early morning walk around their waterfront home on Sydney's North Shore, bought in 1999 and which has never had a registered mortgage.

As one friend puts it: "He is ego-less. He doesn't see why he is important, he just sees the bank….he likes people to underestimate him."

Thanks for reading Big Business

David Davis

Peter de Savary in the Lions’ Den

March 26, 2006

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First, a confession.  I am a life-long supporter of Millwall football club, the one that no one likes. So when Peter de Savary was appointed chairman I wondered why a person with his controversial business background who confesses to know nothing about soccer, should take on this onerous task of rescuing the Lions.

I had my suspicions when it was announced he has already sold and leased back the training ground; pessimists are saying he has eyes on the New Den, the club's modern ground which was built a just a few years ago.

Now, I know more of de Savary's plans..  This week he sent shareholders a 112 page document in connection with a £5m placing to put some much needed cash into the club. 

Not only does it disclose for the first time the full extent of de Savary’s financial failures of the past, it reveals a neat little option deal he has come up for himself.  Read what the Sunday Times Business News has to say.

To describe Peter de Savary as a colourful character is a serious breach of the Trade Description Act. He warrants 1,240,000 Google references… are just three I have picked at random to whet your appetite.

The Cigar Lover
Back on The Rich List
Big plans for Land’s End
Thanks for reading Big Business

David Davis

Aviva’s £7 billion bid bungler

March 26, 2006

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Whatever happens to Richard Harvey during the rest of his illustrious business career, he will always wear the tag of the man who bungled the £7 billion takeover bid for Prudential Insurance.

Harvey, group chief executive of Aviva, the world’s sixth largest insurance group, posted the bid for the Pru but somehow it got leaked, then Harvey let it be known that he wouldn’t sweeten the terms but this was corrected a short while later via a statement to the London Stock Exchange.

Then the Aviva board formally withdrew the offer.

Such a foul-up is most unusual for Mr Harvey who, at 55, is one of the most successful leaders in the global insurance business.

Born in Gloucester and educated at the University of Manchester where he achieved a degree in mathematics, he has come a long way in the past 14 years. In 1992 he was running the far-flung New Zealand outpost of Norwich Union, a medium sized mutally owned British insurance.

Three years later he was spotted by the board as a star for tomorrow and  appointed to the Norwich Union board, becoming group chief executive in 1998.  Mirroring the dramatic transformation of Norwich Union through a series of mergers, including Commercial Union, the ‘don’t make a drama out of a crisis’ company and more recently the motoring group  RAC, he found himself in the top job at Aviva.

In the lead up to the bid for the Pru, he surprised the City by announcing Aviva’s best-ever performance in general insurance – an operating surplus of £2.9bn, well ahead of the £2.65bn consensus forecast of analysts and 29 per cent higher than 2004.

Industry observers expect Harvey to dust himself down and then look at the Pru again at some time in the future.

Thanks for reading Big Business

David Davis

Clare Furse sits tight – and the price goes up

March 16, 2006


The Economist got it right when it said in 2001 of Clara Furse’s appointment as the first woman chief executive in the 228 year history of the London Stock Exchange:

“Pretty in pink, petite and partial to pearls: it would be easy to misjudge Clara Furse…she has built her career in the world of derivatives-broking on a reputation for ruthlessness.”

Today, the woman. long regarded by some as awkward, charmless and argumentative, her obduracy is at last reaping full rewards. Courted by Australian, German and French exchanges, she has steadfastly refused to relinquish the LSE’s independence, even though not long ago some advisers were urging her to do a deal at half today’s share price.

The 47-year-old investment banker started her career in the City of London almost two decades ago and has played a lead role in the growth of the financial futures industry since 1990 when she was appointed a director on the board of Liffee, the London International Financial Futures Exchange, and until May 1999 she was deputy chairman.

Mrs Furse was born in Canada to Dutch parents before being educated in Colombia, Denmark and England.

She is married with three children and lives in South London.

Mrs Furse studied economics at “the other LSE” – London School of Economics – then joined Philips and Drew as a commodity broker in 1983.

In later years she was appointed a director of the company, which subsequently merged with Union Bank of Switzerland and changed name to UBS Phillips & Drew. The bank changed name again following its merger with Swiss Bank in 1998 this time to UBS.

By the time Mrs Furse left the company following the merger she had been a managing director at UBS for five years and global head of futures for four of them.

She stayed in her next job as chief executive of Credit Lyonnais Rouse until December 2000, moving to the LSE the following year into what many regard as the hardest job in the City of London.

Thank you for reading Big Business

David Davis

Vincent invests in Gita’s women’s fund

March 5, 2006

I hear that two people featured in Big Business in February have decided to go into business together.

Property tyconn Vincent Tchenguiz has pledged £2 million to the Trapezia Investment Fund created by Gita Patel as the first dedicated to back women-friendly companies.

Gita is reported as saying:  “Having the backing of Vincent is incredible. It is not easy to gain contacts like him because the gatekeepers of the financial world are often very insular. But he loved our concept immediately and wants to look at exporting the brand”.

Although purely coincidental, I’m chuffed that two of my ‘movers and shakers’ are collaborating in this way. I hope it works out well because both of them are people who really make business tick these days.

Thanks for reading Big Business

David Davis

Greg Hutchings: The dealmaker is back

March 5, 2006


Remember Greg Hutchings?  He was the entrepreneur who in 1984 built Tompkins, a specialist UK manufacturer of buckles and fasteners for almost 60 years, into a diversified group through a series of acquisitions – and was then in 2000  forced out as chairman & chief executive following allegations of excessive perks, in addition to his annual salary of £999,000, and an annual bonus  of £456,000, plus share options. 

Hutchings, who became known as the architect of old-style conglomerates, was accused of misusing  the company’s corporate jets and central London properties, and keeping his wife and housekeeper on the company payroll.

Out of the headlines, Hutchings set about rebuilding his business career and bought himself into Lupus Capital which formerly invested in troubled small and midsized public companies with hopes of turning them around or selling them piecemeal

Installed as executive chairman in 2004, his plans to transform Lupus into another engineering conglomerate, take off tomorrow (6 March) when he announces his first big deal – the purchase of Schlegel, a building-products group, for £84m, part of the Dutch-based Unipoly.

He says he intends to  use Lupus to build “a couple” of large groups of businesses that could then be sold to return capital to investors.

Greg Hutchings was born in Venezuela, South America. His career has included employment as a Management Quantity Surveyor at Taylor Woodrow plc, and as a Corporate Development Manager from Hanson Trust plc.

His interests include hockey, tennis, windsurfing and skiing. He enjoys music, reading, the arts, and collecting.

Thanks for reading Big Business

David Davis

The Peer, Noddy, Bob The Builder & Lassie

March 3, 2006


Lord Waheed Alli, the first of a new generation of business peers is finding life outside the House of Lords particularly hectic at this moment.

Having just led a successful £110 million management buy-out of Chiron, the British owners of characters such as Noddy and Mr Men, he’s facing at least one, possibly two, takeover bids from rival firms. HIT Entertainment, owners of Bob The Builder, Thomas The Tank and Sooty, has tabled an offer while there are rumours of a counter bid from across the Atlantic by the owners of Lassie and The Lone Ranger.

This world of make believe is the ideal playground for Lord Waheed Ali who was given a life peerage at the age of 34 in 1998, to become the youngest and first openly gay peer in Parliament, and a man that Prime Minister Tony Blair believed could help him reach out to a younger generation.

Waheed Alli was bought up in south London and left school after his O levels.

At the age of 16 he got his first job as a £40-a-week researcher on a magazine called Planned Savings, before going on to work for the late Robert Maxwell’s publishing companies.

In the mid-1980s Alli, living in fashionable Islington, got a job in the City and began earning big money.

But he got bored of investment banking and formed a television production company with Charlie Parsons, a rising star of television.

They teamed up with Bob Geldof in 1992 to form Planet 24 Productions, and through a series of shrewd deals – including their audacious win of Channel Four’s breakfast slot – made a lot more money.

Carlton TV later Plant 24 and after but left after apparently losing out in a management restructure he left to continue his entrepreneurial exploits.

Lord Alli was seen as the antithesis of the stereotypical “establishment” peer – young, Asian and from the world of media and entertainment.

Some commentators initially dismissed his ennoblement as a bad joke, citing his inexperience and insinuating that his position had more to do with his New Labour connections than any political talent.

But he took a prominent role in the battle over the age of consent and the attempted repeal of Section 28, the legislation that bans local authorities from promoting homosexuality (campaigners say it prevents agencies carrying out legitimate health education work).

I sense we’re going to hear much more about Lord Alli – the political activist and entrepreneur.

Thanks for reading Big Business.

David Davis

John Magnier: “Softest spot are his teeth”

March 1, 2006


When an Irishman beats an Arab sheik in a no-holds barred auction for a horse you just have to find out more about the winner of this multi-million dollar shoot out.

Yesterday in Florida John Magnier, owner of the Coolmore Stud in County Tipperary got the better of a bidding war with Sheikh Mohammed’s Godolphin team to smarh th world record for a thoroughbred bought at auction.

The bidding began at $3 million for the son of the leading American stallion Foreestry and ended when Magnier’s representative had the final nod at $16 million.

So who is John Magnier and how did he make his fortune.

Born in 1948, the son of “well to do” farmers, he grew up near Fermoy in County Cork where his family had been breeding horses since the 1850s. His mother, Evie Stockwell, who ran the family stud after the death of Magnier’s father, was a particularly formidable figure and a close friend of Ireland’s most successful trainer, Vincent O’Brien. The connection between the families was cemented when Magnier married O’Brien’s daughter, Susan.

Magnier’s breakthrough was to realise that the “gentlemanly pursuit” of breeding and owning thoroughbreds could be “professionalised to generate big returns. His eureka was to do it as a business, not a pastime.

Certainly, conditions in Ireland in the early 1970s couldn’t have been better: in 1969, finance minister Charles Haughey, a friend of Magnier,  had pushed through legislation giving stud fees tax-free status. Magnier saw his chance, and went for it.    

He teamed up with Robert Sangster, heir to the Vernon football pools fortune, they brought in “training genius” Vincent O’Brien and in 1975 they took over Coolmore Stud.

The business plan was based on Magnier’s conviction that the big pay-off in racing no longer lay in prize money, but “in the breeding barn”. “If you don’t have the semen,” he said, “you don’t have the industry.”

The rest is history. Today Magnier, who at one time was a major shareholder in Manchester United FC and a possible bidder for the club for the takeover by the Glazer family, is one of the richest men in Europe.

Although he made his fortune breeding champion race horses, his shrewdness and toughness would have taken him to the top of any business. “The softest thing about Magnier,” it is often said, “is his teeth.”

Thanks for reading Big Business.

David Davis