UK: The enhancement of Hanson. (1 of 8)

UK: The enhancement of Hanson. (1 of 8) - Shirley Skeel traces the 27-year takeover history of the voracious group whose appetite ultimately raised the apprehensions of the mighty ICI.

by
Last Updated: 31 Aug 2010

Shirley Skeel traces the 27-year takeover history of the voracious group whose appetite ultimately raised the apprehensions of the mighty ICI.

"It's a funny day. Your stockbroker rings up and says 'Hanson's going to bid. Can we represent you?' and you hear the cash registers start ringing." It was July 10 years ago, the morning of the old Berec (Ever Ready) group's annual big bash. Chairman Colin Stapleton was bent over his desk when he got the call telling him of the dawn raid taking 15% of his company.

"It's nice to see somebody has faith in us," he quipped numbly to the first journalist on the telephone. It drew a laugh. But within two months that faith was a passion. And by January 1982, despite a rival counterbid, Berec was at the altar with a shotgun to its head.

"At the end of the day you have little choice. It is the City's decision." Today Stapleton runs a hotel in Cambridgeshire and ruminates on "the way the world is". As a director he had aimed to create both jobs and profits. Hanson's focus on concentrating on shareholder value, he says, is valid too, but "if you want an industry for your grandchildren, you don't let Hanson around".

Today ICI is intimating much the same message as it burrows through Hanson's record. Criticisms of Hanson's clever accounting and hard-nosed methods are not hard to find. But, disturbingly for the ICI camp, Hanson has also left a trail of successful, if smaller, companies - some under its own wing, some run by new dedicated owners. Says ex-Hanson man Harvey Lipsith, who headed a management buyout of the Allders retail group from the Hanson-controlled UDS: "UDS acted appalling as a conglomerate and every business that was divested performed better under its new management." A former UDS manager concurred with this: "The head office just stopped the local management from running the businesses the way they wanted to." Notably, over Hanson plc's 27-year history, attitudes appear to have changed.

Of the 10 public bids that failed, all, bar one, occurred before 1986. In earlier days Hanson many times dropped a bid if the market or a rival pushed the price too far. But as the group has grown, Lords Hanson and White have been more willing to bid high - the jump in the initial bid for Imperial Group from £1.9 billion to a final £2.6 billion being an example. Sometimes they have drawn criticism over the price; most times they have proved their critics wrong. Either way, it does not bode well for ICI.

But what Hanson's story most suggests, as the Financial Times presciently wrote in 1985, is that "the logical conclusion ... is that the likes of ICI must eventually be swallowed up if the momentum is to be sustained".

James Hanson, says old-time colleague John Pattison, "was always a most remarkable figure". The six-foot-four redhead emerged from the infantry, after seven years of war service, at the age of 26 and returned home to Huddersfield, Yorkshire. He arrived to find that the family transport business, built up from a packhorse round set up by his great great grandmother in 1848, was to be partly nationalised.

With a share of the £3 million compensation, James and his brother Bill set up a haulage company in Canada. However, his brother died in 1954 and James returned, teaming up with his old friend Gordon White. The two began importing large comical American greetings cards, until then unseen in the UK. The business was later sold but the Hanson White trade mark lives on. Throughout the 1950s Hanson's Savile Row suits, his romances with Jean Simmons, Joan Collins and Audrey Hepburn, and his flights across the Atlantic won him an unwanted image. "I was in the propeller set. I never moved into the jet set," he said later.

In 1959 he secretly married an American office worker, Geraldine Kaelin, and a new turn of his life began. Under his father's influence, Hanson learned to rely on successful individuals running their own depots - a hands-off policy that endures today. In the early '60s he and White took control of a family lorry dealer, Oswald Tillotson, and then sold it into the public Wiles Group. Within a year they had taken control, backed by a £300,000 capitalisation. Hanson and White began to weave the net that was to bag some of the biggest prey ever seen in the UK.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today