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by antiaristo » Tue May 16, 2006 6:49 pm
by antiaristo » Tue May 23, 2006 9:18 am
by antiaristo » Thu Feb 01, 2007 5:46 am
Frontrunner Puttnam rules himself out for chairmanship of BBC
· Surprise decision after month of 'agonising'
· Peer says trust should criticise 'offensive' salaries
Will Woodward, chief political correspondent
Thursday February 1, 2007
The Guardian
The BBC's turmoil deepens today as Lord Puttnam, the favourite choice to replace Michael Grade as chairman of the corporation, announces he has decided not to apply for the post. Lord Puttnam, the Labour peer and former film producer who was supported by leading corporation insiders and the culture secretary, Tessa Jowell, writes in today's Spectator magazine that after a month of agonising he will not put his name forward to head the BBC trust, its reformed governing body.
In the article he urges the trust to criticise BBC management "in response to issues of public concern, such as the sometimes offensive salaries paid to key talent". The BBC came under fire last year for paying Jonathan Ross a reported £18m over three years.
Lord Puttnam was considered the frontrunner to restore morale at the BBC, still low after Mr Grade's surprise return to ITV. He was also seen as a fierce advocate of the corporation's independence.
"I will continue to be a vocal supporter of the BBC and all that, at its best, it continues to represent," he writes in the Spectator. "As an institution it is far from perfect, but it does continue to offer the possibility of an eventual victory for sanity over nihilism in the evolution of the nation's media output."
The decision is a surprise to some of his friends. Lord Puttnam believed until a short time ago that he would be a candidate. But after talking to his family he decided he could not commit himself fully to the four-days-a-week post.
Lord Puttnam said last night: "It's the right decision for me. The bottom line is that having reached a point in my life at which, living in Ireland, I have never been happier I couldn't find a way of justifying the possibility of upsetting that."
Last night was the deadline for applications for the £140,000 a year post. Possible but unconfirmed candidates for the job include broadcaster David Dimbleby, Chitra Bharucha, vice-chair of the trust, and Liz Forgan, chair of the Scott trust, which owns the Guardian.
Some in Westminster were critical of Lord Puttnam's outspoken remarks in defence of his former colleague Ruth Turner, Tony Blair's senior aide at No 10, who was arrested earlier this month on suspicion of perverting the course of justice in the cash for honours inquiry.
Lord Puttnam was considering becoming a crossbench peer. It is thought the Conservatives would not have opposed his appointment, although John Whittingdale, Tory chairman of the Commons culture, media and sport committee, was publicly sceptical. He remains deputy chairman of Channel 4 - where he recently called on it to show a "duty of care" to Big Brother housemate Jade Goody - as well as president of Unicef, chair of the Teaching Awards Trust, and chancellor of Sunderland University.
In his Spectator article Lord Puttnam says there is a gulf between broadcasters and the government which appears unbridgeable.
"My own experience has led me to the conclusion that the present relationship between our licensed broadcasters and the legislature is typified by suspicion, misunderstanding, and what appears at times to be a quite staggering degree of ignorance, each of the other," he says. But he warns that the trust has to "establish an effective and robust form of governance" at arms length from BBC managers, led by director-general Mark Thompson.
"The trust's willingness to confront, where necessary, the executive board, will be crucial to enshrining the corporation's reputation for integrity, and for ensuring that it is a body genuinely prepared to think again in response to issues of public concern, such as the sometimes offensive salaries paid to key talent," he says.
In the running
Unconfirmed candidates for chair of BBC Trust include:
Chirtra Bharucha Vice-chair of BBC Trust
Lord Burns Former permanent secretary at the Treasury; chairman, Marks & Spencer
David Dimbleby Broadcaster
Liz Forgan Chair of Scott Trust, former BBC executive
Dermot Gleeson Executive chairman of construction firm MJ Gleeson
Sir Stuart Hampson Chairman, John Lewis Partnership
Baroness Jay Former leader of the Lords
by antiaristo » Fri May 04, 2007 7:57 am
Boots bidders face £1bn pension demand
· Trustees say debt-laden bid makes firm less secure
· Letter to scheme members says talks so far have failed
Julia Finch and Jill Treanor
Friday May 4, 2007
The Guardian
The trustees of the Alliance Boots pension fund are demanding a £1bn injection into the scheme from the private equity bidders planning to take over the chemist and drugs wholesaling group.
The trustees, led by former Boots director John Watson, wrote to the 66,710 members of the pension scheme yesterday saying they wanted the huge payment as a direct result of the multi-billion-pounds of debt that bidders would take on to buy the company.
Article continues
The private equity house KKR and Stefano Pessina, Alliance Boots' deputy chairman, have tabled an £11.1bn bid, which was recommended by the Boots board last week, and are expected to fund the deal with up to £8bn of debt finance. The trustees, however, believe the debt makes the company's future less secure "which could have serious implications for the position of the scheme".
They want "approximately £1bn, which we believe should be met by a combination of a cash injection to be paid over a number of years and appropriate new security".
A spokesman for the trustees refused to elaborate, but it is understood that they want some £500m up-front in cash, plus other security to cover the balance. They are also likely to demand other conditions, such as priority payment ahead of bank lenders if the company were to collapse.
The exact details of the debt arrangements being lined up by the bidders are not yet known, but will be revealed when the formal offer document is published in the coming days.
The demands tabled by the Alliance boots trustees come little more than a month after the trustees of the pension scheme at Sainsbury's told a private equity consortium stalking the grocer they would have to hand over £2bn to cover a deficit a quarter that size. That potential bid eventually fell apart.
Until now the Alliance Boots bidders have maintained that talks with the trustees have been "constructive and amicable" and suggested a deal was close.
However, a source close to the negotiations said the trustees had become irritated by the picture being painted by KKR and Mr Pessina as there was still a big gap between what they were offering and what the trustees wanted. The bidders are thought to have offered around £400m.
In the letter to scheme members, Mr Watson said he had "a number of detailed discussions" with the bidders but added: "I regret to inform you that no agreement has, as yet, been reached."
The letter also says a new valuation of the pension scheme deficit was likely to show a deficit of £305m, up from £85m at the time of the last valuation, largely as a result of members living longer. The trustees want a sum from the bidders that would allow the fund to become self-sufficient and able to meet all its obligations in the future with no further contributions.
Last night AB Acquisitions, the vehicle being used by KKR and Mr Pessina to bid for the company, said it would continue to negotiate with the trustees. A source close to Mr Pessina insisted the trustees' demands were "in no way a deal breaker".
The trustees' letter was sent just hours after the Pensions Regulator warned would-be bidders for companies that they could face demands to pump millions of pounds into even seemingly healthy pension funds. The regulator is to update its rules on how pension funds should be treated during takeover bids, particularly bids funded with debt, giving trustees a more important role.
Backstory
The Pensions Regulator came into force in April 2005. It replaced the Occupational Pensions Regulatory Authority and has extended powers to protect the benefits of pension scheme members, improve scheme administration and cut the compensation claims put into the pension protection fund. The regulator assesses risk to determine whether schemes will be able to meet their obligations. Those risks range from an employer's ability to support a scheme financially to the competence of trustees. The chairman of the Pensions Regulator board is David Norgrove, who was chairman of the trustees of the Marks & Spencer scheme when Philip Green attempted to buy the group. His failed bid was frustrated by the pension trustees.
by antiaristo » Sat May 12, 2007 4:41 pm
Boots bidders trying to scrimp on staff pensions, warn trustees
Julia Finch
Saturday May 12, 2007
The Guardian
The trustees of the Alliance Boots pension scheme believe the private equity bidders planning to take over the company are willing to wage a "war of attrition" in an attempt to pay as little as possible into the company's pension funds.
A spokesman for the trustees said they were "frustrated and disappointed" with Kohlberg Kravis Roberts and Stefano Pessina, Boots deputy chairman, who have agreed a deal to pay £11.1bn for the chemist and drug wholesaling group.
The bidders have insisted since their first approach for the company in March that they were keen to reach an "amicable" agreement with the trustees to underline their commitment to the workforce.
It has emerged, however, that there is a huge gap between what the trustees want and what the bidders are prepared to offer. Last weekend former Boots director John Watson, head of the trustees, wrote to the scheme's 67,000 members to say he wanted KKR to commit £1bn to the scheme. Mr Watson said the huge debt - more than £8bn - being used to finance the acquisition made the company's future less secure and told members he wanted a cash injection - understood to be about £500m - and "appropriate new security" to cover the remaining £500m. The cash would allow the scheme to meet its obligations to its members and pensioners if the bidders run into financial problems and are unable to make any further contributions.
However, KKR is understood to have suggested an upfront payment of little more than £50m. It is also reluctant to provide the additional security the trustees are seeking.
The trustees' spokesman said that many staff had contacted them with their fears over the security of their pensions. "Their feeling is that all the directors have sorted themselves out with millions of pounds but there is not the same interest in the pensions of the staff."
In takeover documents published last week it emerged that Alliance Boots directors will share more than £10m as a result of the takeover, with £6.5m going to chief executive Richard Baker.
According to existing pension regulation the new owners and the trustees have 15 months to reach a deal and funding agreements can stretch over 10 years.
The trustees believe KKR favour a 10-year contribution plan, but that it is far too risky given the scale of the debt, and interest payments, the company will face.
The trustees' spokesman said: "Mr Watson is very conscious that he has the future financial security of 67,000 people resting in his hands."
by antiaristo » Thu Jun 14, 2007 7:04 am
MPs call for more pension safeguards in bids
By Karen Attwood
Published: 14 June 2007
Politicians waded into the Alliance Boots pension row yesterday, tabling an Early Day Motion questioning the power of pension trustees to secure the future of their members.
A cross-party group of MPs urged the private equity house Kohlberg Kravis Roberts, which has agreed an £11.1bn takeover of the chemist, to reach a speedy settlement with the Boots pension scheme trustees. The Work and Pensions Select Committee (WPSC) also called on the Government to look into the powers of pension-fund trustees to investigate whether they are able to protect the interest of their members after an acquisition by a highly leveraged company.
KKR and the pension trustees are in last-ditch talks to try to come to some agreement over the future of the scheme ahead of 21 June, when the takeover will be put forward for court approval. The trustees have threatened to take legal action to block the takeover, but sources said an agreement is now looking likely this week.
KKR has offered the scheme, which has more than 66,000 members and a £305m deficit, about £340m over 10 years plus a £600m safety package. It is understood the trustees had wanted a higher figure upfront. The two sides are believed to be thrashing out details. If they have not come to an agreement before the court hearing, lawyers say it has the potential to be a "serious legal hurdle".
Norman Russell, the head of pensions at the law firm Berwin Leighton Paisner, said: "This is pretty much uncharted territory. How will a judge make a decision on whether the pension scheme is a creditor he can listen to or whether it is prejudiced? It is difficult to predict."
The WPSC has called the pensions regulator, David Norgrove, into a private meeting next Thursday, the same day as the court hearing. Mr Norgrove will be questioned over how effective the regulator has been in the whole debate.
Jenny Willott, the Liberal Democrat MP for Cardiff Central, who tabled yesterday's motion, said it was important to focus on the issue now because of the implications it may have for the future of other schemes under similar private-equity takeovers.
"As the largest-ever private equity takeover, it is a precedent-setting deal," she said. "The uncertainty for people in the pension scheme must be uncomfortable. It is not a short-term impact. It goes on for decades into the future."
She said the debate had raised the bigger question about the power of trustees. "Pension trustees have a legal responsibility towards the pension scheme members," she said. 'There is the question of whether they have the power they need to resolve this." She hopes to garner the support of more MPs this week.
The GMB union, which has been campaigning against private equity takeovers of high-street names, said the industry has been exposed. Paul Maloney, a national officer at the GMB, said Alliance Boots executives became millionaires overnight while failing to safeguard workers' pensions. "They have to commit to fully fund the pension scheme, in cash and upfront," he said.
Alliance Boots accepted an 1,139p-a-share offer from KKR and the company's deputy chairman, Stefano Pessina, in April. Last month, John Watson, the head of the pension trustees, strongly criticised Alliance Boots for agreeing to the takeover before a deal was reached on pension provisions. But the chairman, Sir Nigel Rudd, said it was one of the "best run and best funded" schemes in the FTSE 100 and he had had assurances that it would continue that way after the company was taken private.
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