How Burtonwood was thrown to the wolves
TALES OF THE UNEXPECTED
The heady world of business is one of constant surprises. Charlotte Dalgarno meets Lynne D'Arcy, the new chairman of the CBI North West, who just let the wolves in and let herself out of a job
On a crisp Winter's morning in early November, Insider rolls up at spooky Childwall Abbey to meet Lynne D'Arcy, managing director of pub management company Burtonwood, to discuss her new role as chairman of the Confederation of British Industry's (CBI) North West division.
With such a magnificent fax8dade on the 15th century building, Insider would not have been surprised if the abbot himself had answered the door instead of one of the gang of cleaners that was working furiously inside in order to get the place, now a Burtonwood pub and hotel, ready for opening time.
"Hello there, through here," waves a beaming and impeccably groomed D'Arcy from the back of the bar. "Did you find us okay? Can I get you a tea or a coffee? How about something to eat? Are you warm enough there?" she continues in an educated Merseyside accent, eager to make her company as comfortable as possible.
D'Arcy started her professional life as a solicitor specialising in employment and company law before joining Burtonwood in 1985 as a legal expert. She soon rose through the company's ranks to legal director and then managing director in 1995. Under her guidance the company turnover has grown to an estate of 462 pubs and despite poor summer weather reported pre-tax profits of £35.7m. And D'Arcy is quick to assert that the pursuit of profit is one thing to which she is devoted:
"People lose sight of that, don't they? I gave a little talk at a local high school regarding career options. They had never really had anyone from business before in to speak to the kids. At the end of my talk I said: 'It's actually okay to make money if you want.' A few of the children did take it on board but I'm not sure how well it was received around the room."
She says that she is looking forward to her new challenge at the CBI. She takes over from Geoff Muirhead, chief executive of the Manchester Airport Group.
"I was a little concerned just how much time it would take because I have a full-time role, but I already go to meetings and I make a contribution so I thought: 'I'll give it a go, if they think I can do it.'
"The Burtonwood board and staff have been supportive. I suppose they think I'm naturally bossy really so it is just more people for me to boss around." At this point she laughs to herself and tops up the teacups in a manner that is congenial rather than bossy.
Perhaps a better way to describe D'Arcy is proactive. She announces that she has clear objectives in mind for her time as chairman and is eager to get going: "We've identified the things that would be important to CBI members, things we're trying to influence. The general burden on industry, on business in general is overwhelming and, for every piece of legislation they bring in, we'd like to throw two out.
"Energy for the future: where's it going to come from? We should be spending time now actually investigating the future of resources.
"And transport is also a big issue. How are we going to get around? It's all very well we produce these things but how do we get them to market. And it takes ten years to build a road - we believe that you have to make decisions now. "
Education is also on the agenda. "There was this big feeling that we are pushing too many kids towards becoming graduates as opposed to looking at vocational options. You try getting a plumber."
Trying to fathom how D'Arcy likes to operate, I ask if she has worked out an agenda for her coming year's work with the CBI: "Agendas? No they evolve. A business has to evolve. You can't be too prescriptive.
"I mean we have an election and a pre-budget and you have to be reactive. You can't be too prescriptive because the world is not going to fall in with your 12-month pattern. So we know what we are doing at the next month's meeting but that is as far forward as it goes."
That said, what does she see happening with Burtonwood in 2005?
"It's going to be more of the same organic growth, and we could go into acquisition mode if we can get our hands on some cash - so we certainly could acquire. but it is a very competitive market at the moment. Property prices have gone up like residential prices. Of course we are chasing all the same pubs. Not very exciting but steady and the City doesn't like surprises anyway."
With that the rest of the tea is supped and the meeting comes to an end. But D'Arcy's words about not being to prescriptive in business turn out to be deeply prophetic.
Within days of the interview word reaches Insider's offices of a jump of a pound in Burtonwood's share prices due to a rumour of a takeover. And on 3 December Midlands-based brewer and pub company Wolves & Dudley announces a £3120m offer for Burtonwood.
Time for another meeting with D'Arcy. This time in mid December, it takes place at Burtonwood's headquarters, originally the 19th century home of Burtonwood Brewery founders Jack and Jane Forshaw.
As we sit in the boardroom, or Auntie Molly's bedroom as it is known by staff, around another pot of tea the twist in the tale of Burtonwood unfolds. A dynamic and bold deal, but who made the first move?
"They approached us quite definitely. Then they came in to see us and gave us the written offer," explains D'Arcy.
"We have always had a very supportive shareholder base but at the end of the day when your share price is £33.70 and someone offers you £35.50, well, on several levels it gives you dilemmas but on a commercial level it is a no-brainer. There was definitely something there that we had to take seriously and put to our shareholders, because that is our obligation as a public company, isn't it?"
And at such a good price, shareholders must be very happy. "I think from their point of view they wanted to show that they were serious early on and that they weren't just fishing. They probably wanted a price that was a knock-out blow that saw off any competition, because they want to succeed at this. So they offered an attractive price."
She continues: "Wolves & Dudley wanted to put the announcement out on the 3rd because they announced their full-year results that day - so from their point of view it is attractive to be able to say to shareholders: 'We have had a good year and this is what we are going to do next year.'
"But it also happened to be the day of the Burtonwood Christmas party. So not great timing."
With the company sold and the headquarters likely to close over the next six months, D'Arcy must have some upset staff on her hands.
"People have been upset. We have got a lot of people who have been here a long time - one person has been here 42 years, lots of people have worked here 20 plus - so to them it's hard. Understandably because of the future plans, if there's no future for the head office here because economies of scale, that's where Wolves & Dudley are going to make some of the profit."
D'Arcy is keen to assert that everything will be done to find new jobs for the staff that are due to go. But with the sale of the company it also means she is out of a job herself. Was she not tempted to secure a role in Wolves & Dudley as part of the deal?
D'Arcy is resolute: "It has not been offered and I'm not interested. The way I see it if I can't run it, I don't want to do it.
"I'm not sure what I'm going to do next; we'll see what the New Year brings, there has been a few approaches but I haven't had time to think about it with being so busy doing the deal."
One thing she is sure of is her role with the CBI. "They are happy for me to continue and if anything I might have a bit more time for it all now. It's very relevant experience and has been a learning curve even for me as a solicitor to see the mechanics of the deal. A few CBI members have emailed me to say 'been there, done that', and that it could be a good second chance for me."
So no regrets or backward glances. D'Arcy is very upbeat about it all: "It just signifies business, how dynamic it is, ever changing. No job's for life and at the end of the day it is about profit."
D'arcy's words about not being too prescriptive in business turn out to be deeply prophetic. on 3 december wolves & dudley announces a £3120m offer
Also in: January 2005
-
NORTH WEST TOP 500 COMPANIES
Our annual review of the North West Top 500 Companies reveals a new company at the top and that this is the age of the niche business.
-
CHRISTMAS QUIZ: THE ANSWERS
Las Vegas or Stalyvegas, how many answers did you get right in our Christmas Quiz?