The hidden persuaders: British PR firms have come to dominate global M&A tables, says ALEX BRUMMER
Financial media regards City communications firms with a degree of disdain. Many see the likes of Brunswick and Finsbury Glover Hering as obstacles, with a job to spin a tale and to keep intrepid reporters at a distance from the truth.
The dark arts deployed in hostile situations such as contested takeover bids, when less experienced reporters are ignored or cajoled into submission, should never be tolerated.
Yet we should remember that the new breed of global firms, which began as small outfits in or around the Square Mile, are as much part of London’s emergence as a world-leading financial centre as the investment banks, the private equity buccaneers and ‘magic circle’ legal firms.
The new breed of global PR firms are as much part of London’s emergence as a world-leading financial centre as investment banks, private equity buccaneers and ‘magic circle’ legal firms
My early discovery as a journalist working in the US was that there was no culture of financial PR.
Companies did their own communications and those which did employ outside experts, such as the investment bank Salomons, used publicists which usually consisted of one person and a dog.
Garnering reliable information on the complex rescue of Chrysler in the 1980s was like pulling teeth. There was a big space on Wall Street and in lobbying on Capitol Hill to move into.
The UK firms have become big hitters in the US, only rivalled by Clinton-connected Teneo.
It needs all the reputational advice it can muster following allegations of drunken, inappropriate behaviour by its boss Declan Kelly at the Vax Live concert in Los Angeles.
It is to the credit of Alan Parker at Brunswick, Roland Rudd at Finsbury et al that they saw the opening and exploited it.
From its understated HQ at Lincoln’s Inn, Brunswick has grown into an enterprise valued at £500million, with tentacles which reach across the Atlantic and into Asia.
Releasing cash by bringing in outside investor BDT will assist in avoiding a brain drain. Parker’s own local difficulty over disclosures at Save the Children, where he was chairman, has not held him back.
Among Brunswick’s breakthrough operations was working with City newcomers Goldman Sachs in defending Britain’s then premier industrial group ICI from an assault by Lord Hanson.
Finsbury was at the forefront of the battle to save Astrazeneca (an ICI spin-out) from a hostile takeover attempt in 2014. Andrew Grant at Tulchan helped to keep Unilever out of the hands of private equity and in London.
At present Brunswick is behind the barricades at Glaxosmithkline where aggressive activist Elliott Advisers has taken aim at Emma Walmsley, one of a handful of female FTSE 100 chief executives.
Global Britain is all about projecting the UK’s skills as a service provider.
It is remarkable that from small acorns in the City, British PR has come to dominate global M&A tables.
Let’s be clear from the start: St Modwen is no Morrisons. Britain’s food security, up to 100,000 employees and consumer choice are not at stake.
That doesn’t mean that it should be ushered into the arms of Blackstone enthusiastically.
The board, headed by the estimable Danuta Gray, has not covered itself in glory. It accepted a low-ball bid and was forced to eke out a higher price of 560p a share or £1.3billion after dissident investor JO Hambro felt it was sold short.
The difficulty is that St Modwen defies analysis because it is a dog’s dinner of a company with a bit of housebuilding and a promising warehousing operation. It is the latter which made it attractive.
Blackstone has unlimited amounts of capital and is on a global rampage. If it carries on as it is, it could end up owning the whole world.
That would not be pleasant given its raw history with care homes in the UK and trailer parks in the US.
But it cannot be blamed for malfunctioning equity markets or an unambitious management team which could have picked up the logistics ball and occupied the fastest-growing space in real estate.
What a mess.
There is a nice symmetry about ITV moving into the BBC’s abandoned broadcast centre at White City. Cutting costs has been paramount but making long-term decisions about ‘hybrid’ working, with Covid still raging, is premature.
After all, media is all about mixing and creativity. As a senior FTSE 100 executive told me the other the other day: ‘I would rather slit my wrists than attend one more Zoom meeting.’
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