On Monday Ralph Findlay put his feet up and enjoyed a pint of Pedigree – the beer made by the company he heads. He deser-ved the luxury after being locked in a year-long battle to keep control of Wolverhampton & Dudley as two bidders tried to snatch the traditional brewer and pub owner from his grasp. Last week W&D's board finally managed to win enough backing from its shareholders, and Mr Findlay is now sunning himself in Greece. "The process went on far too long," he said. "Now it's business as usual."
The predatory partners were Pubmaster, tipped only last weekend to have won the battle, and Robert Breare, the entrepreneur who heads Noble House Leisure. In these uncertain economic times, when cash is king, their £485m bid looked like winning. Indeed, Mr Findlay admitted he had been tense about the result.
The episode started a year ago when Mr Breare linked up with the private equity house Botts & Co to make a tentative approach that valued W&D at around £500m. This bid was rejected by the board. But shareholder pressure forced the company to put itself up for sale, and during the year Mr Breare joined up with Pubmaster for another offensive.
Despite the headaches caused by Mr Breare, Mr Findlay has no hard feelings, describing his adversary only as "opportunist". This concentration on the issues and avoidance of personality-based feuds won him points. But it also helped the bid defence that Mr Findlay, chief executive since March and previously finance director, energetically courted investors to win them round, even if the prolonged takeover battle was disruptive and exhausting.
"There have been days when I have gone to London, come back and then had to drive back to London again," he said.
Now he's looking forward to running the company rather than dealing with corporate issues. "What I need to do is spend a lot more time in the business and a lot less time in London. I know Takeover Panel rules and the City of London better than I want to at the moment."
He said the lowest point came earlier this year when he had put a lot of work in and helped Mr Breare and Pubmaster on the due diligence, with the aim of putting a "proper" offer to the board. The bidders' deadline approached, at the start of June, for submitting a formal offer, and only minutes before their time was up, a bid was delivered. It was less than the original offer from Mr Breare that had already been rejected. "For God's sake, we have only got a bid of 480p on the table," Mr Findlay thought.
The bidders loosened the purse strings last month and the amount was raised to 513p, but it wasn't enough for the shareholders.
During the bidding process the PR spinning machines for both camps went into overdrive, with countless stories claiming one side or the other had won. "It does make me laugh ... I'm looking forward to when we are making less headlines and more progress," said Mr Findlay.
He didn't pay much notice to the view that Pubmaster was destined to win because W&D was an old-fashioned company with a dismal future. "I thought they were all wrong. The issue was how much of the cash was on offer. As we were seeing investors, I felt we were changing the openness of W&D."
Investors were promised a £200m share buyback, which meant they could see some cash return in the near future. Mr Findlay made it clear that the frowned-on mixture of breweries, tenanted pubs and managed pubs would be run separately, streamlined and invested in. "Pubmaster tried to paint it as old-fashioned, brewery-led, but we were able to demonstrate that was not the case."
He must have been persuasive. Crispin Wright at NM Rothschild, who advised W&D during the bid battle, said: "[Mr Findlay is a] very impressive chap, a very clear thinker and a clear presenter – straightforward and effective."
Mr Findlay started his career as an exploration geologist in Northern Ireland. Although he managed to steer clear of danger during the Troubles, he did have a few scrapes. His work involved measuring the density of rocks and his equipment was a black box with wires sticking out of it, which he had to use next to roads and bridges. "At least twice I emerged from under a bridge to find that the army had sealed off the road and were very keen to know why we were under a bridge with a black box," he said.
Perhaps that's why his nerve held so well in the battle with Pubmaster and Mr Breare.
It is easy to say the worst is now over but there is still a lot to do. W&D is selling off its more modern, upmarket bars like Pitcher & Piano and concentrating on community pubs – a popular move with some. The Campaign for Real Ale, which opposed the recent bid, claims the diversion from its traditional strategy is what went wrong in the first place.
"They should be concentrating on what they do best, producing good-quality beer and managing local pubs – not doing fancy in-town bars," said a spokesperson. The group managed to drum up 8,000 people who supported the management and opposed the bid.
Despite the celebrations, if the new strategy doesn't work, investors will go for the jugular. One shareholder, who voted for the management, said Mr Findlay has a year to come up with the goods. "If Ralph Findlay doesn't deliver then you will see another bid."
Mr Breare said that in a year's time, when Takeover Panel rules allow, he might bid again. But Mr Findlay does not feel pressured. "It's easy to talk and say things like that without having any interest in following through."
These issues are far away from the minds of the staff, advisers and real-ale fanatics who are ecstatic about the win. Wolverhampton had a busy night on Monday as locals celebrated. "The sales of beer around the area that night were pretty good," said Mr Findlay.
Although he enjoyed his pints of Pedigree, he hasn't gone overboard and knows there is now a lot of work to do to win over the 47 per cent of shareholders who voted against the management – and to justify the trust of those who did.
Mr Findlay must now reward that trust.Reuse content