Boddington chief due for pounds 500,000

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The Independent Online

Alan Smith, managing director of Boddington, is in line for a pay-off of more than pounds 500,000 after four months' work at the pubs-to-nursing homes group.

He is expected to leave following the completion next month of Greenalls' pounds 518m agreed takeover of Boddington.

Hubert Reid, chairman of Boddington, is to become non-executive director of Greenalls, but the company says it has not made a decision on the future of the other directors.

However, Mr Smith, and the finance director, Alan Rothwell, are not expected to stay.

Greenalls will have to honour existing contracts, and its offer document says it will buy out all unexercised share options.

This means directors and employees could collect up to pounds 8m, with Mr Reid due to receive about pounds 1.4m.

Mr Smith moved to Boddington in June from Kingfisher's DIY chain, B&Q, where he was managing director, to bring some retail experience to the pubs group.

He is paid pounds 165,000 a year and has a two-year contract, and will also cash in under a bonus scheme linked to Boddington's financial performance.

Under the executive share option scheme, Mr Smith holds 129,411 options at 225p, though they would not normally be exercisable until 1998. At Greenalls' bid price of 412p a share, the options are worth pounds 203,000.

Greenalls' offer document says: "If the offer becomes unconditional, Greenalls intends to make appropriate proposals to participants in the Boddington share option scheme in respect of options which remain unexercised."

About 500 jobs are expected to be lost at Boddington under Greenalls' plan to close four offices in the Warrington area and half the 44 wholesale depots in North-west England. The plan is to save about pounds 18m a year.

In addition to paying the pounds 8m or so to buy out the Boddington options, Greenalls faces reorganisation costs of about pounds 23m. Mounting the bid will cost about pounds 16m.

Both groups, whose combined value will be about pounds 1.5bn, disposed of their breweries as the industry restructured following the Monopolies and Mergers Commission report in 1988.

They have made good profits thanks to the over-supply of brewing capacity. But the merger is necessary to maintain the pubs' purchasing power as the brewers rationalise capacity.