Tiny strikes back with a vengeance

Mining deal fans flames in the battle for Lonrho's soul. Paul Farrelly reports; 'Does Lonrho really have a reputation for litigation?', Tiny asks mock naively

"LET THERE be no doubt. Mr Bock won't have the time to do property deals in Germany or anywhere else. He'll be too busy facing me in court."

Nearing 80, Tiny Rowland seems an unlikely Arnold Schwarzenegger, but he's back and with a vengeance in his latest and most bitter feud - with Dieter Bock, German property magnate and chief executive of Lonrho, Tiny's life's creation.

A full-page advertisement in Tuesday's Financial Times heralded the umpteenth, hugely expensive coming. Lonrho shareholders meet this week to sanction the pounds 400m-plus pooling of its South African platinum interests with rival Gencor, creating the world's largest platinum producer.

Mr Rowland thinks the deal too cheap. There'll be "no sex left in Lonrho", he says, after it cedes control of its valuable mining assets. But most of all Mr Rowland is bitter that Mr Bock, the erstwhile ally who turfed him out last March, is dismantling the once-sprawling conglomerate, while he stands near powerless outside the ring.

Outwardly, bitter is the last thing he seems. With a sparkling eye and bubbling-under smile, he leans back in the ornate lounge of his Chester Square townhouse in London: "Does Lonrho really have a reputation for litigation?" he asks mock-naively, referring to battles gone by.

A framed 20 shilling Kenyan banknote bears witness to 30 years of influence and African deal-making. Specially printed but never issued, the 1987 note on the side table bears Mr Rowland's beaming features and he still wields clout as the "friend of Africa".

"No Rowland, no flotation," he says, citing Ghanaian president Jerry Rawlings' response to attempts to oust him from the board of Ashanti Goldfields, Lonrho's last big mining spin-off, where he remains ensconced despite Mr Bock's opposition.

Mr Rowland's scraps remain legendary in business lore: his rallying of small shareholders to defeat a boardroom coup in 1973, while Mr Bock was a 33- year-old tax lawyer; his ruthless dismantling of Antipodean raider Alan Bond's liberal accounting techniques; the near 10-year feud with the Fayeds over Harrods, sealed two years ago with a "love-hate" peace.

"Just Tiny up to his old tricks again," a Bock spokesman says of the latest salvo. What the Bock camp is less eager to publicise, however, is its own efforts to discredit Lonrho's founder. Sure, Mr Rowland has been digging around in Germany, piecing together the rise - and plotting the future fall, he hopes - of his outwardly unassuming foe. But Bock's camp, too, have been up to tricks, which they deny for fear of being tarred with the brush reserved for Mr Rowland.

The story starts in April this year when a German snooper-cum-journalist, Frank Anderssohn, bounded uninvited into Chester Square, promising dirt on Mr Bock, only to be packed off with a flea in his ear. Mr Anderssohn, now languishing over unpaid debts in a Nuremberg jail, promptly turned to Mr Bock, swearing an affidavit over German investigator Rudolf Biebl's attempts allegedly on Mr Rowland's behalf to dish dirt on his rival. Characteristically of Mr Bock's skilful public relations operation since his arrival at Lonrho in 1992, the affidavit quickly found its way into the Sunday Times.

In the murky, scent-a-fast-buck underworld of private eyes, Mr Anderssohn, who has a string of convictions to his name, bore a grudge over money against Mr Biebl, his erstwhile employer. The Bock camp alleged that Mr Biebl's activities were Mr Rowland's own, and Mr Rowland is now suing Mr Bock for criminal libel in a Munich court.

The Sunday Times rapidly backtracked, as has Lonrho, disowning Mr Anderssohn and denying allegations that Mr Bock's aides offered the German journalist up to pounds 1m for his co-operation.

It is not the first time the Bock camp has fought fire with fire. Staff at the Financial Times still smart at the mention of a story planted in September 1994 of Mr Rowland's imminent ousting, "an attempted coup by press", which proved groundless.

A peace deal last November also proved nothing of the sort. Under that, Mr Bock agreed to cancel an option over Mr Rowland's remaining 6.3 per cent stake and the founder would become honorary president and retire from the board.

Instead, after comments to the press, Mr Rowland was fired in March and as a result, Mr Bock tore up the option deal, opening up another rich dispute likely to return to the courts.

Mr Rowland intends to have his day on Thursday and there will be one hell of a row if he is barred from the meeting or from voting his shares. Most analysts and institutions are backing the mining merger, which involves Lonrho swapping its 73 per cent stake in the younger West and East Plats mines for 32 per cent of an enlarged Implats group taking in Impala Platinum's and Gencor's older mines.

"It deserves a lot of scrutiny but the deal is right for Lonrho," says analyst Paul Beaufrere at broker James Capel.

Some of Mr Rowland's criticisms, now circulated in the latest missive to shareholders, do now seem wide of the mark. Lonrho insists the deal is worth pounds 402m net to the group, after writing off intra-group debt of pounds 46m and a pounds 36m legal claim against Impala.

Knocking them off again and suggesting the deal is really worth only pounds 330m would then be "double-counting". On the other hand, Lonrho's own circular is fuzzy on the debt point and the deal has already dropped in value from pounds 430m since the original announcement in June because of a fall in Impala's shares.

Possibly more serious is a potential claim from South Africa's Bafokeng tribe over mining concessions to Impala. Lonrho is confident that any challenge will be beaten, but has an option to sell its new Implats shares to Gencor.

That sets a ceiling rather than a floor - the lesser of 74 rand per Implats share or the average price over the previous month. To get even the pounds 380m implied at 74 rand, that raises the prospect of Lonrho scrambling to use its option before Implats shares go through the floor on a successful Bafokeng claim. Other investors might scream and shout about that.

Whatever the battle of words will be on Thursday, Lonrho already has enough proxy votes to see the deal through. "Hasta la vista", though, this war will run and run.