Family business – finding the exit
One day in August the London Stock Exchange was buzzing with news that the shares in a company well-known across Essex and Hertfordshire had surged by about 50 per cent. The company, Suffolk-based brewer and pub operator Greene King, had received a takeover bid of 850 pence per share from an international property investor; the shares had previously been trading below 600p.
Accorded shareholder approval on 9 October, the bid had the support of Greene King’s directors. So, the company is set to lose its independence after 220 years. This was once a family business, founded in 1799 before limited liability companies existed, and grew into a hospitality empire valued by the bid at £4.6bn. Its founder Benjamin Greene was an ancestor of the author Graham Greene.
Before the recent bid, Greene King had done its quota of buying up other family firms in Herts, Essex and elsewhere. Since registration as a limited company in 1887, its takeovers have included Rayment of Furneux Pelham (1931), Simpson of Baldock (1954), and Ridley’s of Hartford End, near Chelmsford (2005). Among its larger buys UK-wide: Old Speckled Hen brewer Morland, and Scotland’s Belhaven.
Sometimes the chance of being taken over at the right price is welcomed by a quoted company’s directors and shareholders, though stock markets do see hostile bids. Where unquoted family-owned companies are concerned, there can also be disagreement. After two or three generations, shares are typically divided between more family members, whose views on the business may vary.
For almost any family business the question will arise at some stage as to how, collectively or individually, its owners may exit. Realising part of a valuable stake to enable diversification of family wealth is one driving factor; providing for Inheritance Tax payment can be another. If flotation isn’t feasible, shares may have to be offered to fellow shareholders before any other private sale.
Our firm’s Corporate, Company and Commercial Law team deals with the above and other aspects of corporate and commercial activity, including private equity finance, mergers and acquisitions, reorganisations, joint ventures and management buy-outs. The great variety and depth of our experience enables us to think creatively when addressing any issues your company may be facing.