View from City Road: Explanations needed at Spear

It is scarcely surprising that Francis Spear, fourth-generation Scrabble- maker and chairman of the family firm JW Spear, should welcome Mattel's pounds 10- a-share offer. It is a full 100p a share more than last week's offer from Hasbro, which he declared 'fair and reasonable'.

He was not around yesterday to comment on whether his earlier endorsement had been influenced by the fact that Hasbro had offered him a job - or by the good relations that have developed between him and the manufacturer of the famed Sindy doll since it first took a stake in his company four years ago. But it is revealing that other board members were convinced that a 16.5 times historic multiple was far too low for a company with a strong brand name and which had trebled its earnings in the last five years.

Strangely, although he welcomed the latest bid, Mr Spear is still not ready to fall in line with his boardroom colleagues. His colleagues may believe that to be Mattel's bridgehead in the British games market offers significantly better prospects for JW Spear than the alternative - allowing Hasbro to add an extra 16 per cent to its existing 40 per cent UK market share. But Mr Spear is still 'considering his response'.

He might like to know that Mattel hasn't ruled out employing him; it is simply that the ridiculous three-day limit to find an alternative bidder, imposed by Hasbro, left Mattel no time to engage him in discussions.

The affair underlines the risks investors face when they get involved with companies where there are a small number of large shareholdings.

Mr Spear may have stepped down from the board of trustees of the family trust three weeks before the Hasbro offer was made, but those who remained were hardly likely to ignore his recommendation. And Hasbro's 26.7 per cent stake made its position so powerful that its attempt to freeze out a counter-offer was very nearly a success.

So all credit to the efforts of Barings and the determination of Spear's directors not to sell the company short. Mr Spear has them to thank for the fact that he, his family and its trusts stand to get at least an extra pounds 2m for their 40 per cent stake. The least he could do is give them an explanation of his conduct.