Corporate adventurer Andrew Regan’s attempt to launch a pounds 1.2
billion break-up bid for the Co-operative Wholesale Society has
unleashed some of the fiercest fighting seen in any takeover battle
since the 1980s.
So far this gory saga has featured private eyes, secret videos, offshore
accounts and press leaks. Now the CWS has called on the Serious Fraud
Office to investigate some of Regan’s previous business dealings.
The CWS strategy has been both effective and surprising. Effective
because it has tackled Regan on his major weak point - his status as a
youthful outsider - and because it has managed to muddy the waters about
his business ethics. It has been surprising because the CWS has been so
open in its use of such bare knuckle tactics as secret filming.
As in politics, slinging mud is an effective way of sowing doubt in
voters’ or investors’ minds about your opponent while deflecting
attention from your own shortcomings. To do so without getting yourself
covered in the brown stuff as well requires skilled PR handling. But it
also requires intelligence.
The use of investigators like Control Risks has long been a feature of
corporate warfare, and it can be devastating. For example, it was
arguably the discovery that Hanson had funded the late Lord White’s
passion for racehorses which ultimately scuppered the conglomerate’s bid
for ICI, rather than any reasoned business arguments.
But it is not without risk. Most of the investigator’s work involves
plodding through information which is publicly available, if difficult
to find. Of the cloak and dagger stuff, surveillance in a public car
park is about the mildest manifestation, grubbier work like dustbin
raking, while not illegal, are still widely seen as unethical and can
backfire on those who employ them.
The skill lies in knowing when to get tough. Faced with apparent high
level disloyalty within its own ranks, the CWS felt justified in
resorting to extreme measures. By being transparent, it has largely
forestalled criticism of its methods. It has also boosted its case
The video gave City editors the kind of exciting pictures they almost
never get the chance to use, and fuzzy long lens shots are remarkably
effective at making people appear shifty.
An unexpected bonus is that the CWS has managed to appear feisty and
streetwise - unlike anything one would have expected from that dozy old
giant. The thought that private eyes are now a respectable sight
alongside PR advisers and bankers is still a far fetched notion. But the
CWS has taken a calculated risk which may well pay off.