Outlook: Sunderland absentees rock the boat

RARELY has the usually sleepy world of regional brewing been so filled with the sound of gun shot. With the dust only just beginning to settle on the vitriolic two-way bid battle between Wolverhampton & Dudley and Marston, Thompson & Evershed, we now have a humdinger of a row at the Sunderland brewer, Vaux Group, which without ongoing chairman, chief executive or finance director, is now left rudderless, defenceless and wide open to a breakup bid.

Underlying this sudden burst of activity is a belated recognition of value wallowing in these traditional backwaters of British business, and an increased determination among shareholders to do something about realising it.

It was apparently without a trace of irony that Sir Paul Nicholson, the outgoing chairman, told analysts at his last results briefing that he hoped his successor would be as focused on shareholder value as he had been for the past 27 years. Shareholders, which include the enfant terrible of fund management, Phillips & Drew, would be forgiven for hoping otherwise, for Vaux shares have underperformed the rest of the stock market by a half during that period. Even Sir Paul had begun to feel the winds of change, however, and reluctantly he had agreed to a partial breakup of the group through the sale of its two breweries and some pubs. This was a plan that threatened to severe his family's connection with brewing, which goes back generations, so it must have been a relief when his brother, Frank, popped up as the favoured bidder for these interests and the board granted him exclusive negotiating rights.

Unfortunately the new chief executive, Martin Grant, and his finance director, Neil Gossage, didn't agree. They think that to close the breweries, which incidentally would have made Sir Paul's name mud in Sunderland, sell off the surplus assets and sign a new discounted beer supply deal with a national brewer, would yield more value. What's more they went behind the backs of the rest of the board in expressing their misgivings and outlining their alternative to major shareholders.

Their sackings raise two issues. First, is it ever justified for a chief executive to break ranks and ask shareholders to vote against the board's favoured strategy? Plainly it is when the board is doing something which is not regarded as in the best interests of investors in general. So the second question is whether the sale of these assets to the chairman's brother, given the alternatives, amounts to a validation of Mr Grant's disloyalty.

In usual circumstances, these questions would demand a thorough airing. As it is, the company has left itself so exposed to a hostile breakup bid, that we may not need to know the answers. The price being paid by Ladbroke for Stakis is leading to a general reappraisal of the value of these hotel and pub businesses, and it may well be that analysts are right in pencilling in a breakup value for Vaux of 350p a share and upwards.

Suggested Topics
Life and Style
A teenager boy wakes up.
Arts and Entertainment
You could be in the Glastonbury crowd next summer if you follow our tips for bagging tickets this week
Life and Style
It is believed that historically rising rates of alcohol consumption have contributed to the increase
food + drink
Arts and Entertainment
Kylie performs during her Kiss Me Once tour
musicReview: 26 years on from her first single, the pop princess tries just a bit too hard at London's O2
Life and Style
fashionEveryone, apparently
The erotic novel Fifty Shades of Grey has already been blamed for a rise in the number of callouts to the fire brigade for people trapped in handcuffs
voicesJustine Elyot: Since Fifty Shades there's no need to be secretive about it — everyone's at it
Arts and Entertainment
A new Banksy entitled 'Art Buff' has appeared in Folkestone, Kent
Life and Style
Playing to win: for Tanith Carey, pictured with Lily, right, and Clio, even simple games had to have an educational purpose
lifeTanith Carey explains what made her take her foot off the gas
Arts and Entertainment
The White Sails Hospital and Spa is to be built in the new Tunisia Economic City.
architectureRussian billionaire designs boat-shaped hospital for new Dubai-style Tunisia Economic City
Husain Abdullah returns an interception off Tom Brady for a touchdown
nflLeague has rules against 'sliding to ground on knees'
Arts and Entertainment
Critics say Kipling showed loathing for India's primitive villagers in The Jungle Book
filmChristopher Walken, Bill Murray, Scarlett Johanssen Idris Elba, Andy Serkis, Benedict Cumberbatch, Cate Blanchett and Christian Bale
Life and Style
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

SQL Developer (Stored Procedures) - Hertfordshire/Middlesex

£300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...

Day In a Page

Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style