Sir Rocco risks running out of ammunition

City & Business

IT'S terribly unfair, but more often than not hostile takeover battles are won or lost in the first 48 hours. First impressions count. The most compelling image from Granada's pounds 3.3bn grab for Forte last week was that Sir Rocco Forte was not at the helm when the first shot was fired, but 250 miles away shooting pheasant.

Gerry Robinson, Granada's chief executive, could hardly have hoped for a better start. Sir Rocco inevitably looked out of touch with his company and in love with gentlemanly pursuits - the kind of man who might prefer tinkering about with "trophy" hotels such as the Savoy to the nitty-gritty of running the core businesses of Happy Eaters and Travelodges.

But there was much more potent ammunition to come. Granada and its adviser Lazard Brothers proceeded to do a complete demolition job on Forte's management. By using 1990 as the base date for their analysis, they have painted a devastating picture of management failure. Over the five years, the Forte share price is down 40 per cent against the stock market, earnings per share are down 41 per cent and dividends are down 24 per cent.

First, second and third blood to Mr Robinson, then. We have yet to hear Sir Rocco's defence. His vitriolic attacks on Granada, detailed on page 3, will carry little weight with shareholders, I suspect. As far as shareholder value is concerned, it's an open and shut case. Sir Rocco would be crazy to fight this battle on the two companies' respective track records.

The interesting question is not whether Forte shareholders will yield, but whether Granada is wise to expand so aggressively into the hotels and restaurants business.

Its experience in the industry is almost entirely through motorway service areas - hardly the most competitive end of the catering industry. Motorists pull in when they urgently need fuel or a meal or a pee, emphatically not because they like Granada service stations better than Welcome Breaks or Blue Boars. Motorway services are virtual monopolies. Just because Granada makes money from service stations does not mean it can successfully run hotels and restaurants where there is real competition.

It is on this vulnerable spot that Forte will have to focus its firepower. Diversification outside core areas of expertise is not popular in the City. Forte needs to portray Mr Robinson as an expansionist gone mad, so hungry for his next big acquisition that he could imperil the entire company.

For the truth is that Granada is rather boxed in. The TV rentals business looks dull and mature. And in conventional TV it has got as big as its going to get, following the acquisition of LWT.

Even on this ground, however, Sir Rocco may find it hard to inflict a deep wound. Mr Robinson boasts he knew little about television when he arrived at Granada. The creatives distrusted him at first. John Cleese famously called him an "ignorant upstart caterer". Yet a few years later Granada TV is thriving and even the luvvies now love Mr Robinson.

It is too early to write off Forte. We haven't seen the defence document yet. And the Council of Forte remains an imponderable. But five days into the bid, Forte is looking as vulnerable a Yorkshire pheasant.

Split at the top

THREE days after Cable & Wireless proves conclusively that you can't run a company with two chief executives, British Telecom announces a boardroom shake-up that gives it . . . two chief executives. BT's Sir Iain Vallance is splitting his chairman and chief executive role, handing over the chief executive post to Peter Bonfield of ICL. But Sir Iain continues as a full- time executive chairman. That, to my literal mind, means BT has two chief executives.

Sir Iain insists he will stand back from the day-to-day running of the business, taking more of an ambassadorial role.That is fine in theory. It may be difficult in practice, especially as Mr Bonfield has spent all his working life in the computer industry and has an awful lot to learn about BT.

As Lord Young and James Ross so spectacularly demonstrated at Cable & Wireless, the slightest friction between executive chairman and chief executive can have horrendous consequences.

Lord Young and Mr Ross had been sparring for months. The tension came to a head last weekend with the threat of mutiny. Both of them were sacked on Tuesday. The damage to the company's reputation, its strategy and its relationship with joint venture partners around the world will take years to gauge.

Meanwhile, shareholders are left wondering how things could go so wrong in such a seemingly Cadburially correct boardroom. The non-executive ranks were filled with intelligent, eminent people. Mr Ross repeatedly reported his misgivings to the most senior of them as far back as six months ago. Yet the boil was inexplicably allowed to fester.

The episode has all the makings of a classic case study for MBAs. Who knows, it may one day appear on the curriculum at Manchester Business School, where Mr Ross just happens to be chairman.

Greenbury gagging

TWO weeks ago I wrote that the Greenbury Committee had been "nobbled". We were the first newspaper to report that its key recommendation on pension disclosure had been watered down.

Members of the committee are at last waking up to the danger. Geoff Lindey, chairman of the National Association of Pension Funds' investment committee, spoke out last week. "Powerful voices" were trying to block Greenbury, he said.

As we report today, Tim Melville-Ross, head of the Institute of Directors, has also raised his head above the parapet. "It's absolutely not what we intended," he told the Independent on Sunday.

But if a watered-down Greenbury is to be avoided, all the great and the good who sat on the committee have to speak out loudly, unitedly and soon.

One problem is that the committee has been disbanded and so cannot easily agree a common response. Another may be that its chairman Sir Richard Greenbury, chairman of Marks and Spencer, had a ghastly time running the thing. The last thing he will want is to return to the fray.

That's a pity. It will be a sad day for shareholder democracy if those "powerful voices" prevail.

Start your day with The Independent, sign up for daily news emails
Voices
A daily miscellany of general election facts, figures, trivia and traditions
voicesThere's still time for someone to do something to make us care
Life and Style
tech
Arts and Entertainment
Michael Corleone, played by Al Pacino, goes back to his family's Sicilian roots in the first 'Godfather' film
film
News
news
News
Kim Kardashian speaks on the Today show about her step-father's transition
PEOPLE
Sport
Wenger and Mourinho square-up to each other earlier this season
sportAll the action from today's Premier League, including Everton vs Man Utd and Chelsea vs Arsenal
News
Tepper had a stunningly successful career as a songwriter
people
Arts and Entertainment
Len Blavatnik
music
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

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions