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
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests
Mexico: A culture that celebrates darkness as an essential part of life

The dark side of Mexico

A culture that celebrates darkness as an essential part of life
Being sexually assaulted was not your fault, Chrissie Hynde. Don't tell other victims it was theirs

Being sexually assaulted was not your fault, Chrissie Hynde

Please don't tell other victims it was theirs
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border