SNC boss's job 'in jeopardy'

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The Independent Online
Michael Marks' job as chairman of Smith New Court was believed to be in jeopardy last night after his firm's largest shareholder, Sir Evelyn de Rothschild, reacted angrily to proposals that he sell out.

Insiders described relations between the two as extremely strained, as Sir Evelyn cancelled a planned meeting at which Mr Marks was to seek his backing for the sale of SNC. Merrill Lynch, the US securities behemoth is competing with Commerzbank, a big German universal bank, for Smith's equities expertise.

"Mr de Rothschild has clearly decided to play hardball. I suspect he needs a lesson in bid tactics," said a source close to one of the parties.

Sir Evelyn's refusal to talk for now appears to have put off a resolution of the battle until next week. Participants said no meetings had been planned over the weekend. SNC's advisers, Phoenix Securities, were yesterday trying to reschedule the crucial meeting with Sir Evelyn for Monday, by which time Mr Marks hopes he can present a package in its entirety.

Inside Rothschilds, which with its 26 per cent stake in SNC holds the key to any successful deal, there was little attempt to disguise the anger at the tactics of the broker's senior executives.

"Sir Evelyn was livid, not because of being told Smiths is talking about selling out, but because he feels let down that this has been going on behind his back for months," said a City insider.

Rothschild is not ruling out a sale to the right bidder, but appears to be seeking to do so on its terms. If no deal is concluded, the implication is that Michael Marks' position would become untenable.

A big stumbling block appears to be that both suitors have demanded an irrevocable commitment to sell from Rothschild before they make a firm bid.

Sir Evelyn, by contrast, appears determined not to be bounced into any decision, and has suggested that Merrill and Commerzbank must first come out into the open with an offer. Commerzbank has confirmed it is in talks. Merrill, despite having assembled a 50-strong negotiating team in London, continued yesterday to refuse any formal comment on SNC.

"I think there has been a bad miscalculation by Smiths that Rothschild would be forced to go along for fear of its stake price collapsing.

But Sir Evelyn takes a long view on the participation and is not going to be pressured," said a source.

If a successful bid war develops, Rothschild could see the value of its stake going up to pounds 125m, as other interested parties are expected to break cover.Among those banks said to have an interest are Paribas and Credit Agricole of France.

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