Sir Brian Goswell, Brent Walker's chairman, said yesterday. "We believe GrandMet should pay us interest on the amount we overpaid for William Hill. Unless we can reach a settlement quickly, and there is no sign that we can do so, then we will take the matter to the courts."
It is the latest twist in a long-running legal wrangle that stems from Brent Walker's pounds 685m acquisition of William Hill in 1989. Brent Walker claimed that GrandMet overstated William Hill's profits and that therefore it had paid too much for the business.
Arthur Andersen, the accountancy firm acting as independent arbitrators, ruled last October that Brent Walker had indeed overpaid by pounds 117.5m. But it only received pounds 36m as it had already withheld pounds 50m from the final payment for William Hill and was charged interest on the money owed. Now Brent Walker is claiming it, in turn, is still owed interest on the pounds 117.5m it was deemed to have overpaid, which it estimates amounts to pounds 100m.
Sir Brian and George Bull, his counterpart at GrandMet, have held numerous talks about compensation owing, but discussions remain deadlocked. GrandMet has resolutely refused to pay a penny as it believes the original contract to sell William Hill made no provision to cover interest payments.
The matter has been passed on to the companies' lawyers. If they cannot hammer out a deal soon, Brent Walker plans to sue GrandMet.
Brent Walker is in the process of selling William Hill in an attempt to reduce its pounds 1.2bn debt mountain. Even if it disposes of the betting chain, however, it will be able to pursue its legal case against GrandMet. Sir Brian has received several offers for the business, including bids from Bass and CinVen, the venture capitalist group. Some of the bids are thought to exceed earlier estimates of pounds 650m. It plans to whittle down the field to several leading candidates within the next few weeks.
GrandMet will be keen to settle the dispute once and for all before merging with Guinness. Analysts believe it may be willing to pay some compensation to Brent Walker, although it would baulk at forking out pounds 100m.Reuse content