Outlook: Tarmac/Aggregate

SIR NEVILLE SIMMS, chairman of Tarmac, is being accused of letting ego get in the way of the creation of shareholder value. Merger talks with Aggregate Industries broke down earlier this week amid bitter disagreement over just who was going to be in charge - Sir Neville, or the head of Aggregate, Peter Tom.

Scandalous, many cried. Management ego has undermined a merger which was clearly in shareholders' interests, just like Glaxo Wellcome and SmithKline Beecham. And because Tarmac seems to be the company more obviously in need of treatment, it is all Sir Neville's fault for not agreeing whatever demands Mr Tom might have had.

In truth, however, it seems to be less Sir Neville who is to blame than Mr Tom. The two had agreed a division of management functions which seemed reasonably fair. Mr Tom would be chief executive, Sir Neville chairman, and the two of them would jointly chair the committee charged with integrating the companies after the merger.

At the last moment, however, Mr Tom changed his mind. He wanted Sir Neville out of the picture altogether and if he wasn't prepared to go, then the deal would be off. Since Mr Tom appears to have tried this tactic twice before in his climb to the top, and with some success, he might reasonably have expected it to work this time round as well.

The first time was when Mr Tom reversed his family company Bardon into the larger Evered in the early 1990s. In the process Roy Kettle, chief executive of Evered, agreed to step aside and become vice chairman. Shortly afterwards he left entirely.

Much the same thing happened when Bardon was reversed into Camas, again a larger company, to create Aggregate Industries last year. For years these merger talks had foundered on "management issues". Eventually it was agreed that Alan Shearer, chief executive of Camas, would become non executive chairman of the combined company. Then, inexplicably, it was announced that he would step down altogether, so as to "break the impasse".

Plainly Mr Tom is something of an operator, but it is hard to understand why shareholders in Tarmac should want to help him in his endeavours unless there is something in it for them. This was meant to be a "no premium merger", not a takeover. For a takeover, which is what Mr Tom now seems to be demanding in all but name, it is customary to pay a premium.

Who knows, perhaps Mr Tom will eventually get his way, but since when was it part of the fiduciary duty of directors to agree to sell themselves short?

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?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test