Inside the world of business
Buckley shown the door but Mulroney manages to survive
LESLIE BUCKLEY may have been dramatically kicked off the Independent News Media board, but another director quietly escaped the same fate yesterday.
Institutional investor advisory firms ISS and Glass Lewis, which recommended that shareholders vote against Buckley’s re-election, had also suggested that former Canadian prime minister Brian Mulroney should follow Buckley out the door. The proxy share advisers, who act as corporate governance watchdogs, said Mulroney could not be classified as “independent” due to a previous business relationship with the group.
Unlike Buckley, Mulroney secured a vote of almost 93 per cent in favour of his re-election at yesterday’s AGM.
But he did face the ignominy of questions about his competence to act as a director by a representative of a South African shareholder. In between wanting to know when the Independent’s circulation would rise, the persistent questioner pushed chairman Brian Hillery (75) on the wisdom of having a board where so many of the directors were over 70, and speculated about Mulroney’s ability to act as a director given his attendance record at board meetings.
Mulroney attended just four of a possible 10 board meetings in 2010 due to illness.
Hillery said “board refreshment” was under constant review. “I’m still standing anyway,” he laughed, nervously.
“To defend us from this vicious onslaught,” said Mulroney (72), “Ronald Regan was 70 when he became president and he did okay. We’re quite aware of our ages.”
Meanwhile, Baroness Jay, another one of the offensively aged directors, noted that she managed to chair the remuneration committee “despite my advancing years”. There was also nothing stopping her stretching across the directors’ table to pass a note to Gavin O’Reilly, as a representative of Dermot Desmond read out his statement-cum-lecture to the board.
Greencore’s Uniq offer gives food for thought
REPORTS THAT Greencore has thrown its hat into the ring for British food company Uniq gives food for thought. Uniq is one of the leading players in the British convenience food market. It is also one of the industry’s most troubled companies. Having extricated itself from its roots in the British dairy industry, the company – then known as Unigate – tried to reinvent itself as a pan-European enterprise, before selling off its various dairy businesses to focus on the convenience food markets.
Its main problem, however, has been a huge pension deficit, which resulted in the company implementing an unusual equity-for-pension swap earlier this year, which led to the company’s pension fund trustees taking control of 90 per cent of the company, effectively putting Uniq on the market. Uniq has two main divisions – Food to Go which produces sandwiches, salads and wraps for retailers including Marks Spencer, and its less successful desserts business.
Kerry Foods, a major player in the UK convenience food market, is understood not to be interested in the business. It is generally more focused on brand, rather than private-label offerings and any acquisitions in the short term are expected to be in the global food ingredients space.
For Greencore, the benefits of a link-up with Uniq are obvious – opportunity for streamlining and consolidation, and access to M S (Greencore currently supplies Sainsbury’s, Asda and Co-op in the main), though the question of what to do with the dessert business remains.
Whether Greencore has the will or the means to pay the estimated £100 million price-tag, is of course another question, and industry sources believe any serious bid for Uniq is still a long way off.
Something to salvage from banking wreckage
THE PURCHASE of Bank of Ireland Real Estate Management represents a small but significant step towards salvaging something from the wreckage of the Irish banking industry.
Several commentators – most notably Conor Killeen of Key Capital in an recent article in this paper – have pointed out that, if done correctly, the dismantling of the Irish banks could give rise to a new generation of Irish asset management firms in much the way the collapse of GPA gave rise to the Irish aircraft leasing industry.
What is significant about the deal between Bank of Ireland and US-based Kennedy Wilson is that the existing management are taking a “substantial minority stake” in the new venture. The company will retain the mandate to manage Bank of Ireland’s €1.6 billion property portfolio but, more pertinently, will be the launch pad for expansion into Europe by Kennedy Wilson, which currently manages €7 billion of assets.
William McMorrow, the chairman and chief executive of Kennedy Wilson has ambition to repeat in Europe the success it enjoyed in the Japanese market in 2002 following the collapse of the property market there.
It is obviously very early days but the potential clearly exists for an Irish-based operation of some scale to emerge phoenix-like from the ashes of Bank of Ireland Real Estate Management. If nothing else the deal should give encouragement to other asset management teams in Bank of Ireland and the other banks to take their fate in their own hands.
NEXT WEEK
The European Central Bank holds its monthly meeting on Thursday. While not expected to increase rates, it may signal such a move in July.
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Current Account is the weekly Irish Times business podcast, presented by assistant business editor John Collins. It takes a look at the business and economic issues of the week with Irish Times business reporters and outside experts. We also feature business people talking in-depth about their experiences in our One-on-One series of podcasts
