Mid Kent takes a final stand against `vultures'
Saturday 02 November 1996
Ten months after the bid was first announced, the simmering feud between the two sides has boiled over into a furious public row as Mid Kent mounted a high-profile public campaign against what it claims is an "arrogant and hostile" carve-up of a defenceless British company by French aggressors.
At a formal hearing on Monday before the MMC panel, Geoff Baldwin, Mid Kent's chairman and chief executive, will claim Saur and General Utilities, which each own 19.5 per cent stakes in the Maidstone-based company, have in effect already merged their interests.
Evidence for the complaint revolves around the behaviour of the two French conglomerates at Mid Kent's annual meeting in July, where Mr Baldwin claims they combined to vote down several board resolutions, including an executive bonus scheme. Allegations that the two firms acted in concert are thought to have persuaded the MMC to extend its investigation into the takeover from 30 September to 9 December.
"For the first time they came along and voted together," explained Mr Baldwin. "What concerns me now is that I've appointed a new director and I'm unable to offer a suitable executive share plan because of what happened at the AGM."
The response of Peter Darby, managing director of General Utilities-owned Folkestone and Dover Water Services, gives a taste of how bad relations with his neighbour have become. "It's absolute nonsense and we've given the MMC our evidence about his claim. There was absolutely no collusion between us and Saur."
However, as the MMC probe enters its final furlong, there are growing signs that Mid Kent's campaign may have backfired. Unions have backed the bid on the grounds that Mid Kent staff would be more secure under French control.
Worse still, there are fears that the advertising campaign, complete with French vultures preying on a noble British stallion, may have offended as many people as it attracted. Stunts have included trailing a banner from a light aircraft outside the Liberal Democrats' partly conference in Brighton.
Mr Darby claimed he was horrified by Mr Baldwin's campaign and had made formal complaints to the MMC and the Takeover Panel. "He's put out some appalling stuff about the French. For a county which does so much trade with France it is very damaging."
At the heart of the debate is the long-term future of water resources in the South-east, a region in the throes of a severe water shortage.
Saur, which owns South East Water to the west, and General Utilities have pledged to build a water grid across Kent at a cost of pounds 19m without raising bills beyond price limits set by the industry watchdog, Ofwat.
Both French-owned companies have had increasingly stringent restrictions on demand, including the free installation of meters for customers and hose-pipe bans.
Partly through geographic accident, Mid Kent has more abundant water resources. Though 90 per cent of its supplies come from boreholes, it also has a stake in a reservoir near Tunbridge Wells which is managed by the region's combined water and sewerage firm, Southern Water.
However Mid Kent insists its neighbours could buy water from the company at reasonable commercial rates without the need for new infrastructure. According to Mr Baldwin, the idea of a grid "just doesn't make a lot of sense".
Deciding between such complex arguments is the unenviable task of the MMC panel led by deputy chairman Dan Goyder, who organised the controversial reports into the two bids for South West Water.
So far, defending the bid is thought to have cost the company more than pounds 1m, compared with annual profits of pounds 13m.
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