OPINION: Telent offensive lacked charm

At the end of a lengthy profile in Monday’s Financial Times, Ed Truell, the chief executive of the Pensions Corporation, said that...

... with hindsight he would have adopted a different strategy in his pursuit of telecoms support company Telent. ‘We should have spent more time with the regulator explaining what we do,’ he said.

Indeed he should have. Truell’s company specialises in buying companies to gain control of their pension funds. It has successfully done so with Thorn and with the wine business Threshers, but it stubbed its toe when it went after Telent, the rump of what was once GEC/Marconi.

Telent’s pension trustees cried wolf and went for support to the Pensions Regulator. A few court hearings later and independent, unsackable trustees have been appointed and confirmed to resist anything that they believe might not be in the pension fund members’ best interests.

Truell’s company, as part of this process, was roundly criticised because of the conflicts of interest that allegedly lie at the heart of what he is trying to do. He is pressing ahead with the bid but he is going to have to his work cut out winning the trustees over to his way of thinking.

Hence the charm offensive. The nation’s £800bn-worth of pension fund assets are the last great pool of money wide open to predatory attack. Companies have largely lost interest in maintaining them and are looking for ways to shed the responsibility. Protection of the funds, and therefore the members’ interests, is dependent on the resolution of trustees and their diligence.

This is why pension funds have been central to many recent takeover battles – at Sainsbury’s and before that at Alliance Boots.

And in a comment that should gladden the hearts of the PR industry, a veteran of this latter battle said the turning point came when the Boots pension trustees hired external PR advisers.

Until then, they had been thwarted by confidentiality agreements and the bullying tactics often used by US private-equity houses in such negotiations. But all this changed once they started getting publicity for their side of the story and the public, politicians, regulators and the City became involved. The intimidation ceased, more sensible discussions ensued, and they got the protection they sought.

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