Now this turned out to be tricky. Very. Not so much with and the banks, but with BL. Notably, BL Corporate Finance, and one individual in particular.
The Heads of Terms negotiated by the MBO team & BL Cars Ltd stated, the consideration to be paid, 'having traded normally' in the period between offer acceptance and completion. I put this in deliberately to avoid having armies of accountants on each side trying to come up with an asset number at the day of completion, which would be netted off one way or the other. It kept things simple and straightforward. The price to be paid was transparent and fixed. And frankly, in the BL scheme of things (£3billion turnover), the whole Rearsby deal was an insignificant issue/amount. We all had better things to do. BL had bigger, better things to do. For example, getting the MBO into being. Continuity of supply was an important matter for BL. Of course, at this stage, Ford, GM and Our other external customers knew nothing of events. That would come later.
BL Corporate Finance came into the picture; the classic HQ "Abominable No-men". This was the first BL MBO. One senior Abominable No-man, in particular, became very anti. In BL terms, he was a higher grade than myself, and I suspected, going through his mind was, " . . if he pulls this off, he could end up earning more than me!" And I had the impression he viewed us as some ‘northern’ country bumpkins? He particularly didn't like the absence of some sort of detailed valuation upon which the sale price had been agreed and he could not get past 'having traded normally'! He actually set about trying to wind the clock back to get an asset value set down which would be used to offset the actual asset base on the day of completion. In effect he was attempting to re-negotiate the Heads of Terms. This is typical of those in the corporate centre, at head office. Meddlers. Scorekeepers. They don't score runs. Typically, this chap clearly hadn't got enough work to keep himself usefully occupied. Or suffered a lack of control/applied from above to his activities, or, he could simply hop from one fetish to another as he saw fit. He was the classic interferer. The old misnomer, viz. "I'm from head office here to help you."
It was Late 1981. BL Headquarters, Portman Square, London.
I went down to kick things along. To prevent the matter being bogged down in the long grass. Some head office support personnel can be unfamiliar with deadlines.
"Brian, it states, "having traded normally". It Is in the Heads of Terms. That's the agreement. Like it or not. And I can assure you, we have traded and continue to do so, normally."
He reaction, "That's an open book. You could act in way you end up with more assets." (Than what? We deserve? Have earned? Are due? Are normal?) "Brian, we haven't. The agreement is the agreement. Freely negotiated. By grown ups.
"There wasn't a glimmer of admiration or recognition, we had negotiated a good deal for us. Nil. Certainly not for the fact it was simple.
He continued to be awkward/obstructive, rather than supportive. At this stage (the first MBO), it was a unique event. We were saving part of BL and the jobs that went with it! I had hoped for fellow BL employees wishing us well: Bon voyage. Good luck. No such luck with Brian!
He later demanded the deferred element of the consideration to be paid after 3 years must be subject to an interest figure at the end. Again, the agreement didn't state that. It was simply a deferred consideration figure to be paid on a due date. Further, he said the interest rate must be 'commercial' viz. 16%!! (It was in those days!) He was effectively arguing the deferred consideration was a BL loan!!Not so.
But! I had a brainwave. I didn't have to concede this element. However, whilst he was head down, looking at the pence, I can see pounds. BIG pounds."Brian, that must work both ways. If we pay early, then the same 16% can be netted off backwards from the end of year 3 of the deferred amount? We take off, tracking back from the end?" Early payment would reduce the sum owed! He agreed! Amazing!! (We did subsequently pay off the deferred consideration quite early, in year one, thus significantly reducing the deferred sum paid!! Frank Murphy glowed!!)
The constant nitpicking and sparing with Brian was now putting the whole process in danger of collapsing. I had intended to return to Leicestershire that day. I had to get matters back on track. Accordingly, I grabbed a large BL brown envelope and made my way from Portman Square to M&S, not far away in Oxford Street. I purchased briefs, socks and a shirt, razor/toothbrush and walked back, booking myself in the Churchill Hotel. My old clothes, I stuffed in the BL envelope. (I still have it somewhere!) Next morning, up early, I get myself into the BL headquarters and loitered on the top director’s floor, near the executive loos. I knew even main board directors need a pee. I saw Pratt-Thompson go in and had a pee with him.
"How's it going Ivor?"
"Not well. I need your help. Can you reign in your corporate finance man. He's in danger of torpedoing the deal via nitpicking. You and I know what the deal is. Let's get it done!"
Within an hour the atmosphere in Corporate Finance changed (as was Brian) from the awkward squad to positive help.
Phew!!!! My gamble of elevating matters paid off.