profile : Suspicious of the Abbey habit

National & Provincial's moment of destiny is in the hands of a man known for his cool approach. Patrick Hosking examines his record

ALASTAIR LYONS does not seem the sort to be unduly swayed by sackfuls of lucre. Cool, analytical, methodical and cerebral are the sort of words his friends use to describe him. He will need every ounce of that unflappable objectivity this Friday, when Abbey National is due to offer him a billion pounds - give or take a couple of hundred million.

The money is not for Lyons personally, of course, but for the building society he heads, National & Provincial. He and his fellow directors have to decide whether the bid is in the best interests of the society's 1.7 million saving and borrowing members, who stand to receive an average payout of around £600 each if N&P says yes.

But there are other potential bidders in the wings - National Australia Bank entered the running last week - as well as a string of first-division building societies that are seeking merger partners. N&P's days as an independent society are numbered. It is Lyons, as chief executive, who will have the greatest say in whose arms it falls into. And he will be the talk of the building societies industry when it meets for its annual conference in Birmingham this week.

Abbey's wooing of N&P has been tempestuous. Takeover talks fell through 18 months ago on price. The leaking of a story last month saying the Abbey had again been rebuffed only worsened things. Lyons riposted that he would not be bounced into any takeover.

The quarrel only simmered down when the two sides met a fortnight ago. Peter Birch, Abbey's chief executive, says, "Alastair Lyons is very definitely someone I can do business with. I like his style. I like the way he went about the meeting. He appears to have quite a lot of potential." It is, he adds, "highly likely" there will be a place for him on the Abbey board.

But if Birch is the eager suitor, Lyons is playing distinctly hard to get. The meeting with Birch was amicable, he concedes, "but I was surprised his thinking wasn't form- ulated in more detail. He will have to come up with a very specific proposal. His announcement has already created uncertainty for our people and our customers."

Lyons, 41, is not shackled by any deep-rooted emotional attachment to the building society movement. Before joining N&P at 37, he had never worked for a mutual organisation. But for all that, he believes mutuality has advantages: "You have in mutuality an identity of interest between customers and owners, so managers can focus purely on customers. It's easier."

He is proud of N&P's efforts to rescue depositors from obsolete accounts earning uncompetitive rates of interest. For all the lip service paid to mutuality, most societies have not lifted a finger to alert their members to the interest they are missing out on.

However, Lyons is not frightened of trying something new - he learnt to ride a bicycle at the age of 34. If giving up mutuality is the best for his members, he says he will give it up. He points to Marks and Spencer as an example of an organisation that has created shareholder value by creating customer value. "It can be done."

Lyons's big break came six months ago with the ousting of his boss, David O'Brien. O'Brien's singular management approach had become an industry joke. The failure of the merger talks with Leeds Permanent didn't help. And allegations that he mixed personal business interests with those of the society damaged him further. Lyons the finance director became Lyons the chief executive.

According to David Perry, chairman of the games company John Waddington and a non-executive director at N&P, Lyons had impressive credentials. "He's highly num- erate and totally objective in the way he thinks. He's more open than his predecessor. He takes people with him. The cards go on the table and people are invited to be absolutely open in their thinking." Perry, a former England rugby captain, adds: "He's adept and skilful - a kind of Rob Andrew."

Surprisingly, Lyons is not interested in distancing himself from the jargon-laden O'Brien regime. He defends O'Brien's management style, much of which survives intact. "There's been a lot of guff talked about our organisation. If we'd have been a Japanese car manufacturer in the North- east, no one would have batted an eyelid." Still, he admits the society was "not particularly clever'' in explaining its policies to the outside world.

Lyons was born light years away from Bradford, the home of N&P, in the leafy Surrey village of Chipstead, near Reigate, the only child of elderly parents. His father was the cost controller at ICI and bean-counting was in the blood. "I'm afraid I was one of those people who said they wanted to be an accountant from the age of eight, while others wanted to be firemen or train drivers." At 15, there was a brief flirtation with the idea of becoiming a teacher, but his father dissuaded him.

After Whitgift School in Croydon, he went up to Trinity, Cambridge, where he read economics - "one of my great regrets". He would have preferred history. He toyed with politics. He was a member of the university Conservative Association and introduced a fellow undergraduate, Archie Norman, now the Asda chief executive, to the fold.

Their paths have repeatedly crossed, first at prep school and now as twin pillars of the Yorkshire business community. According to Norman, "Alastair's always been exactly the same ever since I've known him. He's a real pro - conscientious, very sensible and with total integrity."

After securing a 2.1 at Cambridge, Lyons joined Price Waterhouse. He qualified as a chartered accountant and joined the merchant bank N M Rothschild. He stayed for less than a year. "It wasn't really my culture. Merchant banking then was quite a bit stuffier than it is now. I made up my mind I wasn't going to stay in London."

He had bought a tumbledown 15th-century vicarage in Shropshire and was doing it up at the weekends. It was a measure of Lyons's good fortune that he found a job with one of the few quoted companies within striking distance of that cottage - the HP Bulmer cider company in Hereford.

He spent 10 years there, starting as group treasurer and ending as acting finance director. John Rud- gard, now chief executive at Bulmers, recalls: "He's a very charming man, but none the less very determined and very meticulous. He's one of those guys who's got abundant energy. He plays by the rules, but in a dogged fashion."

He was not so fortunate with his next employer. He joined Asda in 1989, two weeks after it entered into a pre-sale agreement to buy a string of superstores from Gateway. It was the deal that was to bring Asda to its knees. Lyons's first job was to raise funds for the acquisition as a corporate finance director. This was before Asda's rebirth under Archie Norman.

According to a source who knew the company well, "Lyons was one of the few sane people around at the time." He stayed at Asda less than two years. The lure of a main board directorship attracted him to N&P.

Lyons still looks the picture of a middle-ranking accountant. A rinky- dink monogrammed chain keeping his tie in place is the only sartorial anomaly. He loves the family life. He is married with three children. The family enjoys the benefit of his £300,000 salary - the 20-acre estate, the Range Rover and three horses.

He likes country life and a return to London - to Abbey's head office at Baker Street for instance - would not attract him. Would that prejudice him against the Abbey offer? "I'm very good at compartmentalising my thinking," says Lyons, that chilly objectivity still to the fore.