The Joe Lewis Way

If only Joe Lewis would manage my pension fund.

 

Joe Lewis, one of Britain’s most successful entrepreneurs and the 7th wealthiest person in the UK, who is rumoured to have made more money than George Soros did when the £ was forced out of the European Exchange Rate Mechanism, is in the news again. Well, of course, he is always in the news but these two things just caught my eye.

In February, I wrote about Mitchells and Butlers’ leadership muddle and the difficulty it was having finding a new CEO (http://markballett.com/owners-v-managers).  Joe owns a big chunk of M&B and he seems to think that management should pay attention to what he, and other shareholders to be fair, think; heaven forbid that idea catches on, what will happen to the majority of corporate managers, who often behave as if it was really their own business they were managing?

In 2010, Joe persuaded a majority of the investors in M&B to sack the Chairman and appoint four directors he backed. After an 18 month search, and several years of boardroom turmoil, M&B have now found someone brave enough to step into the lions’ den and that man is Alistair Darby; he comes with oodles of experience from rival Marston’s.  Alistair would not be there without Joe’s support so, hopefully, all will settle down at M&B now and shareholders can get a bit of stability from this leading pub and carvery network, with over 1600 restaurants and pubs across the UK.

Whilst the M&B background noise is going on Joe is making a play for a much smaller but interesting business called Timeweave – god only knows why it is called that by the way – but anyway, it has three things going for it: a 50% share in the exclusive broadcasting rights, into betting shops, for 31 of the UK’s biggest racecourses; a newly acquired financial hedging business that helps businesses “hedge against sporting risk”; and a big dollop of cash, about £30M or so.

Apart from having a doggy name Timeweave also seems to me to lack focus; actually, thinking about it, the two things are probably not unconnected. The horse racing broadcaster bit seems good, as it doesn’t have any competition, but it is hardly a sensible bedfellow for a financial derivatives business and, on top of that, there is a lot of talk about being an investment company – it actually has a box on its website asking for investment ideas. All rather odd to my mind as I tend to think that not many of us could manage such diversity well and there are all sorts of other scale, risk and balance sheet issues to consider.  Joe already owns 30% of this business and seems to think he can do better and so wants control of it all.

Of course I am not Joe Lewis, so it hard to second guess what the great man is thinking, but I just wonder if he thinks that he, as a shareholder, is better placed to invest his money than management are? If he does think that it would be rather consistent with his M&B input after all and equally refreshing. He seems to be a man who likes control and I wouldn’t be surprised if Timeweave metamorphoses into a somewhat more tightly focused entity if Joe gets his way.

I only wish Joe was managing my pension fund, don’t you?

Mark

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