The Groucho Club, the famous Soho watering hole frequented by celebrities and media executives, is fighting off a hostile takeover bid by a young hotel owner.
Benjamin Fry, 29, an Old Etonian and former model, is not a member of the club, but has the audacity to suggest it would be better managed if he took it over.
He has put £10.2m on the table and this week sent a letter to the club's 350 shareholders offering them £2.30 a share, 50 per cent above the current market price. Yesterday, said friends of Mr Fry, he was busy taking phone calls from Groucho members interested in his proposal.
The owners of Groucho stock include arts and media celebrities such as Anna Ford and Salman Rushdie, as well as the Hollywood actor Steve Martin and singer Paul Simon.
Mr Fry's letter is critical of the way the club is being managed by chairman Tony Mackintosh, saying: "The approach to the company's development could, in my opinion, leave both (the club and its brand) ultimately at the mercy of the liquidator". He urges shareholders to force Mr Mackintosh to put his proposals to a vote.
Mr Mackintosh and his colleagues on the board are said to be livid at the young man's "aggressive" tactics, which come at a sensitive time. The club's status as London's top media spot has been successfully challenged by the rival Soho House club.
"Both do a good job," says Mr Fry, "but Soho House has more energy, a sense of taking over from the establishment." He believes an injection of youth is needed at the Groucho. The board "are all over 60 now, and something's got to change", he says. "I'm offering, not to rock the boat, but to bring in fresh air and the next generation."
Mr Fry is a founder of the London K-Bar, and is setting up two "boutique hotels", the Westbourne in Notting Hill and the Sydney in Chelsea. His letter suggests if shareholders back him, these would be "Groucho" hotels. He says he would also like to open a Groucho Club in Los Angeles.
But it is more than a battle between youth and the old guard. Mr Fry accuses Mr Mackintosh of failing to make the most of Groucho assets. "The company makes a return on its assets not much different to an Egg deposit account but without liquidity or security," he told shareholders.Reuse content