Heath Lambert trio make £5m in sale to Jardine Lloyd Thompson

Click to follow

A £130m sale of Heath Lambert to the rival insurance broker Jardine Lloyd Thompson, likely to be unveiled within weeks, will deliver cash, shares and pension benefits worth millions of pounds to the three top Heath Lambert men instrumental in brokering the deal.

Adrian Colosso, Heath Lambert's chief executive since March last year, Mike Bruce, the managing director, and Keith Hamill, the non-executive chairman, will net about £5m in cash and shares between them as part of the deal.

Under the terms of the JLT takeover, they alone will be awarded extra Heath Lambert shares, which earmarked for managers after the company's last refinancing a year ago, but as yet unallocated.

Mr Colosso, already the single largest shareholder with 3 per cent of the company, will be given another 2 per cent. Mr Bruce, who holds a 2.5 per cent stake, will receive a further 1 per cent, and Mr Hamill's Heath Lambert holding will be bolstered from 1.5 per cent to 2.5 per cent.

Between the three, their 11 per cent stake will fetch about £3m in a sale to JLT.

After the takeover, Mr Colosso is expected to take a seat on the JLT board and Mr Bruce will assume a senior position.

Both are believed to be in line for "golden hellos" of cash and JLT shares worth about £1m each, on top of extra pension benefits not extended to other Heath Lambert employees.

A recent financial restructuring, led by Royal Bank of Scotland and Credit Suisse, saw the Pension Protection Fund secure 10 per cent of the company's shares in return for bailing out the Heath Lambert pension scheme. The final-salary scheme, £210m in deficit at the time, was closed. All pension assets are still controlled by trustees but are likely to be transferred to the PPF in the future. The PPF is thought to have had no involvement in discussions between Heath Lambert and JLT.

Some within the City said the deal would be an excellent one for JLT, which will be able to reap substantial cost savings from the tie-up, but they argue that shareholders in Heath Lambert could be better served should the takeover be deferred.

One sector analyst said: "It's a very early stage at which to be selling the company, only a year after the last restructuring. The Heath Lambert equity could well be worth four times these levels if they waited a year or so to reap the benefits of the restructuring."

The past difficulties of JLT and Heath Lambert have been well documented. In late 2004, JLT warned on profits and announced the departure of Steve McGill, its chief executive. Dominic Burke replaced him, and in March unveiled a strategic review that opened the door to bolt-on acquisitions.

In 2003, Heath Lambert's planned flotation fell through, prompting a change of management, disposals and restructuring of its finances. A year ago, it restructured again to leave a company worth about £50m with about £100m of loan notes, preference shares and debt.

JLT has already acquired most of Heath Lambert's Latin American and aviation operations.

Hamill: serial non-exec with the Midas touch

Keith Hamill, named non-executive chairman of Heath Lambert in September, is a busy man. A "professional non-executive", he holds the same role at six other companies, including the brokerage Collins Stewart Tullett, the menswear group Moss Bros and the nightclubs operator Luminar.

Mr Hamill also sits on the board of four other companies, including the electronic parts distributor Electrocomponents as an independent director, and is deputy chancellor of the University of Nottingham, where he read politics.

His decision to "Go Plural" (to use the phrase of another famous multiple independent director, Allan Leighton) in 2000 after years as an accountant and serial finance director has also proved lucrative. Mr Hamill was paid £85,000 by Luminar alone last year.

Non-executive directors should expect to devote about three weeks a year to each company, on board meetings and committees and paperwork.

However, their workload can increase dramatically should a company be caught in a takeover battle.

Mr Hamill is a specialist in complicated situations and has a good record of securing private-equity backing for firms with which he is involved, notably the launch of the airline Go.

As chairman of Moss Bros, he fielded the attentions of Shami Ahmed, the Joe Bloggs fashion entrepreneur. Before that, he was finance director of WH Smith when Tim Waterstone attempted a takeover. It paid Mr Hamill £300,000 when he left in 2000.

After a spell at United Distillers following the Guinness affair, he became finance director of Forte in 1996 when the hotels empire was engulfed by a hostile bid from Granada.

Mr Hamill was embroiled in controversy after it emerged in 2003 he owned share options in Collins Stewart. Current views of best corporate governance practice advise that non-executive directors should not own shares or options in companies on whose boards they sit because that could compromise their independence and ability to challenge the board should the need arise.