CITY. AND SUBURBAN
The Savoy board: glittering prizes and sharp knives
CHRISTOPHER FILDES
War to the knife and fork flares up next week. On Tuesday the Savoy group will bring out sparkling figures, to brandish at Trusthouse Forte, which has 69 per cent of its equity, 42 per cent of the votes, and no part of the direction or management. The Savoy almost doubled its profit last year, and then forecast that this year would be no worse: the figures for the first six months will make that look cautious. So they should, indeed, as a glance at London this summer would suggest. 'If you can't make money in this business now,' says a rival's manager, 'you never will.' But it gives the Savoy room to manoeuvre. Its most recent venture was into Wilton, easily our best and most expensive fish- and-chip restaurant. Wiltons since the war had been a preserve of the Hambro mer- chant banking family. Sir Olaf Hambro used it as his local, and on being told it could no longer keep going under wartime conditions, asked for the restaurant to be put on the bill. Wiltons' move to Jermyn Street, and the costs entailed, gave the Savoy its cue to appear as a shareholder and to take the management contract. Now the Savoy can afford to think about some- thing more ambitious. Tempting and natu- ral is the idea of a top-class city-centre hotel, like the Lancaster, which the group owns, in Paris — the next one, perhaps, in New York? A management contract would be one approach. Bolder, but still possible, would be to pay cash. The cash, after all, is flowing into the group these days, there is money in the bank and no more borrowing on the balance-sheet, and assets in plenty to back any loan the group might raise. The irony is that it would be far more attractive for the Savoy to offer its shares, if the biggest shareholder is right in de- scribing the share price as ridiculously inflated. (Not so inflated, the Savoy direc- tors retort, as to have deterred Trusthouse Forte from declaring itself a willing buyer this year, at or above the market price.) What inflates the price is, exactly, the fine balance of power between Lord Forte's camp and the Savoy board's. The balance shows no sign of tilting, and the board will not risk tilting it by issuing new shares. Lord Forte's will is as imperious as ever, and the shares behind the board are no less firmly held, or less powerfully comman- ded. Their leader, Sir Anthony Tuke, has practised his art of chairmanship on Barc- lays Bank, Rio Tinto Zinc, and (as presi- dent) the Marylebone Cricket Club. The directors include the resourceful Michael Richardson of Rothschilds; John Kemp- Welch, joint senior partner of Cazenoves, Mr Richardson's old firm; Dick Wilkins, for years the stock market's monarch as senior partner of stockjobbers Wedd Dur- lacher; and Sir Hugh Wontner, who in his 36 years as Savoy chairman saw off the great takeover artists in his long day. Time was, when the group's other hotels (Ber- keley, Claridge's, Connaught) were car- rying the Savoy, that a deal might have recommended itself, with Trusthouse Forte taking the hotel and cancelling its shareholding. What was certainly consi- dered was a straight swap with the McAl- pine family when they owned the Dorches- ter — the Savoy would move its customers into Park Lane and the McAlpines would move their bulldozers into the Strand. But now the Savoy is humming profitably again, the group has stopped contracting and wants to expand and the knives, as they should be, are sharp.
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