Comment: Put Brent Walker out of its misery

Comment

Put Brent Walker out of its misery

There was a nice irony in little Frankie Dettori stinging William Hill for pounds 8m even as Ray Hinton, a bean-counter from Arthur Andersen, was concluding that the bookie's owner, Brent Walker, was due pounds 36m from Grand Met. Taking with one hand while you pay out with the other is part and parcel of a turf accountant's life even if the numbers involved are usually more modest.

As ever with Brent Walker, the figures themselves are an irrelevance. It is no coincidence that the amount Mr Hinton decided Brent Walker had overpaid for William Hill in 1989 was half the original claim filed by George Walker's former empire against GrandMet. This has the appearance of a good old-fashioned British fudge and, after deducting a previous debt owed the other way, the result is a piffling irritant for Grand Met and a barely noticeable source of relief for Brent Walker. The second sweet irony is that Brent Walker, of all companies, in its time the doyen of creative accounting, should be the beneficiary of a retrospective clampdown on artificially inflated profits. Before Professor Tweedie rode into town, the sort of acquisition accounting applied to Hill was de rigeur. You could hardly ask for a company better qualified than Brent Walker to spot it.

The resolution of this spat does nothing to change the underlying facts of Brent Walker, which is a company with assets worth less than pounds 600m and liabilities of more than pounds 1.4bn. Clarifying the value of William Hill may make it easier for a sale to be negotiated, but the fact remains that Brent Walker as a whole has no future. Even assuming some worth in the accumulated tax losses of a company that has notched up more than pounds 1.7bn of red ink over the past five years, it continues to be a mystery why the shares have any value at all, let alone that they should jump 40 per cent, as they did yesterday. A death this slow is a painful spectacle. Why don't the banks put Brent Walker out of its misery?