The dispute between the two companies hinged on the profitability of William Hill at the time of the acquisition, which Brent Walker claimed was lower than Grand Met, then headed by Lord Sheppard, warranted. The arbitrator, Ray Hinton, agreed that the profits on which the consideration should have been based were pounds 45.8m and not the pounds 55m figure that was used as the basis for calculating the pounds 685m price tag for William Hill.
As a result of the shortfall in profits, Mr Hinton said Grand Met owed Brent Walker pounds 117.5m, about half the pounds 235m originally claimed by the leisure group. That was to be offset, however, by a sum of pounds 82m which Brent Walker owed Grand Met. A previous court case had ruled in 1991 that Brent Walker should pay over pounds 50m it had withheld from the original consideration plus interest.
A spokesman for Grand Met said yesterday the company would abide by the arbitration and take the pounds 36m as an exceptional hit against the current year's profits. Brent Walker said it was seeking a meeting with Grand Met to resolve several other issues, including a claim for breaches of warranties.
The ruling in favour of Brent Walker follows a decision last week in a Paris court that the company should pay pounds 6m to its former chairman. That dispute arose from a pounds 20m loan made by Mr Walker to the company in 1989 to help it pay for the William Hill purchase. The ruling threatened to trigger a promise from Brent Walker's largest lender that it would put the company into receivership rather than put in any fresh funds, although the bank appears to have stepped back from that ultimate sanction.
Attention now focuses on the future of Brent Walker, which recently wrote down the value of its last two remaining subsidiaries, William Hill and the Pubmaster pub chain, to pounds 570m, which compares with the company's debt burden of more than pounds 1.4bn.
Rumours continue to swirl around the company. Bass and Stanley Leisure have both been linked to William Hill but are thought to have lost interest in the 1,650-strong chain which might raise pounds 500m in a sale. Meanwhile a trade sale of Pubmaster is understood to have been abandoned and venture capital groups are being lined up for a possible pounds 160m deal. Flotation next year is another option.
Brent Walker's shares closed 1p higher at 3.5p yesterday.
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