Pen men take on the mighty BIC baron

Sheaffer, embroiled in a buy-out battle, looks set for a close shave

JOn Moulton, the high-profile venture capitalist who boasts "I've created 110 millionaires" from financing management buy-outs, is finding it hard to shower similar good fortune on the top executives at Sheaffer. His plans to finance an MBO at Sheaffer, whose top-of-the-range White Dot fountain pen sells for about pounds 3,000, are stymied awaiting a decision by the New York appeals court in January.

Mr Moulton's Alchemy Partners venture capital firm is backing Owen Jones, the British chief executive of US-based Sheaffer, and his team, who want to buy the famous but loss-making brand. Sheaffer is now owned by Gefinor SA, a Geneva company representing a group of Middle Eastern investors who bought the business from Textron almost 10 years ago.

But the British are opposed by Bruno Bich, the formidable baron whose family firm BIC is valued at almost pounds 2.7bn on the Paris bourse. BIC is trying to block the planned MBO in the US courts.

Some eight weeks ago BIC, maker of goods ranging from cheap biros to windsurfers, announced in Paris that it had signed a deal to buy Sheaffer for about pounds 31m, less than the company's annual sales.

"We were surprised that BIC went exclusive," said Mr Moulton. "We were working with Sheaffer management to finance a turnround MBO and they had a right of first refusal to buy the business."

Mr Jones and his Sheaffer colleague Shane Dolohanty promptly exercised that right and countered with their own similar deal, backed by Mr Moulton's Alchemy Partners.

BIC responded by resorting to the courts and has succeeded in blocking the MBO at least until January, when a new hearing will take place.

Mr Moulton points out that BIC knew about the executives' right to buy when it launched its bid.

"It's true that Sheaffer's managers had a right of first refusal to buy the company," said Yves Mathieu, BIC's financial comptroller in Paris. "Our position is that they didn't exercise it - it was Alchemy that did."

The two sides also dispute how loss-making Sheaffer will survive the next few months including the important Christmas selling season. Asked how the company will survive until January, Sheaffer's Mr Jones replied: "That's a good question." Other than that, Mr Jones would not comment on the legal row beyond stating he "fully intends" to go ahead backed by Alchemy.

According to Mr Moulton, BIC is obliged to supply seasonal working capital. "But it will be interesting to see BIC writing cheques to a couple of managers they are trying to sue."

BIC says there is no such deal. "We have not injected any money in Sheaffer so far and we don't intend on doing so until we officially own it," said Mr Mathieu.

If the Sheaffer executives and Mr Moulton do eventually win the battle for the pens it will be a sweet victory. A decade ago Mr Moulton, then at Schroder Ventures, helped arrange a pounds 60m MBO of Parker Pens from then- owner Manpower.

That deal alone created a few millionaires, among then former Parker chairman Jacques Margry, since Gillette bought out Parker Pens for pounds 285m, nearly five times as much, in 1993.

Mr Margry is now on the advisory board of Alchemy, which Mr Moulton set up in January this year.

Last month Alchemy paid a "nominal sum" to buy the AG Stanley home improvements business from Boots. The Stanley purchase was one of the worst deals Boots has done, with the high street retailer writing off pounds 180m on selling the business to Mr Moulton.

Additional reporting by Betsy Jelisavcic.

Copyright: IOS & Bloomberg

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
musicThe truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
News
people
News
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the Apple Watch for you? Well, it depends if you want for the fitness tech, or the style
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own