FINANCE AND INVESTMENT
By NICHOLAS DAVENPORT
Mr. Clore and the Savoy Board
But I cannot believe that Mr. Clore, who is a past master at property deals, had any intention of bidding against Mr. Samuel. He is reported to have met a director of the Savoy on a French race-course and to have advised him that all would be well if they played with him. Mr. Lindon reports that on November 2nd Mr. Clore met another Savoy director at Claridges and suggested that he should have a seat on the Board and that the directors should allow him to buy the ordinary stock "so that he could develop the assets." The Board refused, presuming, as they said later, that Mr. Clore's objective would be " to dispose of the freehold property and lease it back again." " Such a procedure," they added, "would bring ruin to the company as the rents which would be payable at the Savoy, Claridges and the Berkeley, on a present- day basis would be so h'gh that the Com- pany could not survive." Mr. Clore (who has denied this objective) then approached Mr. Samuel through a third party, suggest- ing that if he wanted a partner, he, Mr. Clore, might be interested. This was on November 10th or 11th. Apparently Mr. Samuel was interested, for his group would then share the heavy cash outlay with Mr. Clore, but when he heard of the investiga- tion ordered by the Board of Trade on the motion of the Savoy directors he decided against collaboration. Whether Mr. Samuel and Mr. Clore had agreed on the way the Savoy asset, should be developed is not stated but Mr. Samuel's intention is said to
be to rebuild or convert the Berkeley into office property. The Savoy directors, show- ing that they are not asleep, announced on the day before Mr. Lindon's report was published that they intended to build a new and bigger Berkeley hotel on the site of the old one. I imagine that the last word on that point will lie with the City of West- minster which issues the licence.
Morals of the Story
What is the moral of this City thriller ? It may seem wrong that a financier strolling down the Strand or Piccadilly should be able to buy up any hotel that catches his fancy merely by ringing up his stockbroker. But that arises from the fact that we are blessed with the convenience of an open capital market—which enables any business man
to buy control of any company whose shares are quoted on it provided there is a good turnover of bargains. Because shareholders do not bother to attend company meetings effective control can often be obtained by buying up to 30 per cent, of the voting power. According to Mr. Lindon Mr. Samuel has now almost 20 per cent. of the Savoy voting, Mr. Clore over 9 per cent. and the Savoy directors and officials only 7 per cent. Mr. Samuel is not yet in control but he is already in the position to influence policy ; Mr. Clore has a nuisance value and the Savoy board has a useful value only if the ultimate controller wants to run a hotel. Managements, I repeat, have no vested rights but I imagine that the Savoy board will solicit votes from independent share- holders and try to prevent Mr. Samuel obtaining real control. What can be wrong is for managements who are doing a useful economic job for the nation to be turned out by financiers who want to make a quick financial profit.
Previous page
