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ISSUE 1510Wednesday 14 July 1999

  The City spotlight falls once again on 'Daddy Warbucks'
By Andrew Clark and Robert Shrimsley


 



 IT was business as usual yesterday for Michael Ashcroft as he watched a £3.5 billion takeover collapse. Tyco, an American fire alarm company where he has a £350 million stake and sits on the board, was planning a bid for Williams, the British group which owns Chubb and Yale locks. But negotiations broke down.

The news might have spoilt his breakfast, but by lunchtime, he would have moved on to his next deal. It has been a tempestuous few months for Mr Ashcroft. Having taken up the strain of keeping the Conservatives afloat, he has been attacked for the substantial sums he has poured into party coffers.

Very much an outsider to the "pin striped generation" - he is not even in Who's Who - he was an obvious soulmate to the Tory Right-wingers such as Lady Thatcher, who admired self-made men. He considers himself one of "Thatcher's children" and is a friend of her husband, Sir Denis.

Under John Major's leadership, Mr Ashcroft took a less prominent role, although he underwrote party debts. But when William Hague made Lord Parkinson, an old friend of the businessman, Tory chairman, he returned to the aid of the party.

At Conservative Central Office, the man some call "Daddy Warbucks" - after the tycoon in the orphan Annie story - has taken over a wing of the building and also a number of staff from the chairman's office. He keeps a firm eye on expenditure and is consulted on the funding of all major projects although he stresses that he has no input over policy.

He recently moved to a £1.6 million home in Great Peter Street, just round the corner from Central Office, and now lives there with his second wife and former secretary Susie Francis. They also have homes in Belize, where he spent much of his childhood and Boca Raton, Florida. He has three grown-up children by his first wife, Wendy Burrell.

An exotic figure with a wide range of friends, he is said to have funded the alcoholism treatment of Paula Hamilton, the model. After a range of jobs including postman, barman and pop group manager, Mr Ashcroft's career took off when he was 26 when he borrowed £15,000 from Barclays Bank to start a cleaning business. Four years later he made his first million by selling the operation to Reckitt & Colman.

He spent the money buying a stake in Hawley Goodall, a loss-making tent maker. Appointed chairman in 1973, he hit the acquisition trail and began building the company into an esoteric conglomerate with interests in fruit machines, hi-fi shops and double glazing. In a rare burst of glamour, the company bought a 22 per cent stake in the Miss World contest.

Hawley's share price prospered and for a while, Mr Ashcroft was popular in the City. But his penchant for doing complicated deals through webs of nominee companies earned him a reputation for secrecy. Fed up with taking flak, Mr Ashcroft, who was nicknamed ''The Piranha", began looking towards America's more laissez-faire business environment. He shifted Hawley's domicile to Bermuda in 1984.

After a handful of smaller purchases, he went for the big one. Hawley landed a £635 million takeover of ADT, a rambling collection of car auction and security services businesses. In 1991, ADT ran into difficulties - the company's share price performance was disappointing and questions were raised about Mr Ashcroft's investment strategy.

The company's biggest shareholder, the Canadian group Laidlaw, fired off a writ accusing Mr Ashcroft of insider dealing and share price manipulation. The allegations were dropped but the issue added to the City's disenchantment with ADT.

Eventually, Mr Ashcroft sold the company to a "white knight" - Tyco - for £3.5 billion. He made £154 million in the deal.

He staged a City comeback last year by taking control of Carlisle, a tiny property company. In a typically complex deal, he merged Carlisle with a security business, Capitol, and an employment agency, Recruit. Carlisle is Guernsey-registered, owns the Belize Bank, 26 per cent of Belize Telecom and 20 per cent of Belize Electricity.

In April, Mr Ashcroft announced that Carlisle was merging with BHI, another of his Belize-registered vehicles, and launching a £282 million hostile bid for struggling recruitment company Corporate Services. The deal collapsed in acrimony, as directors of Corporate Services quit and Mr Ashcroft had a row with the Takeover Panel over whether he was entitled to withdraw his offer.

Carlisle's shares fell 10p to 850p yesterday as Mr Ashcroft found himself in the spotlight again. His love-hate relationship with the City looks as rocky as ever.

7 June 1999: [City] Williams to reignite talks with Tyco
22 April 1999: [City] Takeover Panel rules on Ashcroft bid for CSG
14 April 1999: [City] Three quit CSG board as Ashcroft pulls back
2 April 1999: [City] Ashcroft launches £207m offer for Corporate Services
25 July 1998: [City] Ashcroft preparing new group for float
2 May 1997: [City] Ashcroft gains $250m as Tyco buys up ADT

 





 
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