Outlook: Rough deal for shareholders
Tuesday 23 December 1997
Ramped out of sight in the early 1990s, Betterware shares soared to ludicrous heights before collapsed amidst a welter of profit warnings. This was not before Andrew Cohen, the founder, had sold a chunk of his stake for pounds 33m at what proved to be the very top of the market. Those shareholders who interpreted this as the classic sell signal for all would have done well out of the company. The rest have not been so lucky.
There is always a whiff of controversy when managers take public companies private. They know the business better than anyone and what is a good price for them is obviously the reverse for everyone else. Furthermore, managements rarely buy out a company without the intention of enriching themselves by eventually taking it public again or selling it on at a profit. In normal circumstances, shareholders would be well advised to give the Betterware management the old two fingers. If managers are not prepared to work as hard on behalf of shareholders as they are on behalf of themselves, they should be fired and new executives brought in who are.
Unfortunately, Mr Cohen is not going to give them that chance, for he has decided to back the management bid with his remaining 47 per cent stake. Mr Cohen is a wise old bird and he may know more than the rest of us, but from the outside it looks like a final kick in the teeth for outside shareholders. Even if they had wanted to, they won't be able to turn this offer down.
- 2 Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
- 5 Amal Clooney gives excellent answer to fashion question at European Court of Human Rights
King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Amal Clooney gives excellent answer to fashion question at European Court of Human Rights
Mafia's wall of silence broken: Victim of Cosa Nostra's extortion rackets in its Corleone heartland co-operates with authorities for the first time ever
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
Louise Mensch says 'F**K YOU' in explosive tweets about David Cameron, Saudi Embassy and the Queen over King Abdullah tributes
iJobs Money & Business
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...