Corporate raiders go hunting

Press, 12 June 1989, Page 30

Corporate raiders go hunting

Ben Laurance of the “Guardian” writes about the trio of businessmen who bought into Ranks Hovis McDougall

Sir James Goldsmith was at his most charming and relaxed when he answered the telephone. One of the richest people in the world, feared corporate raider, and detested tormentor of “Private Eye,” Sir James had just announced that he, Australia’s Kerry Packer of jazzed-up cricket fame, and the Hon. Jacob Rothschild, were together spending more than £4OO million on a stake in Britain’s Ranks Hovis McDougall, maker of homely and reassuring products like Bisto, Mr Kipling cakes, Golden Shred marmalade and Paxo stuffing mix.

agreed, corporate mergers as being a symptom of nothing more than “imperial aggrandisement.” The best take-overs, he said, are “thoroughly hostile.”

This is not the stuff one expects from a corporate raider. Sir James thrives on conflict, and when he and Jacob Rothschild joined forces in March to create a new corporate vehicle with access to a war chest of more than £1.5 billion, they were explicit: they intended to target large British companies which were undervalued — either because they were badly run or because the stock market had simply got its arithmetic wrong.

Acting alone, James Goldsmith has proved himself a formidable dealer. Adding his skills to those of Rothschild and Packer has created a fearsome trio. Yet as he looked out of his hotel window over Fifth Avenue in New York, Sir James was eager to talk only about the weather. “It’s bright sunshine here,” he said, “the sort of day Jo make you happy to be alive.”

Nothing has happened since to suggest their strategy has changed or that either man has mellowed. And the recruiting of Packer — teetotal, lover of junk food and once described by a rival as having all the good looks and charm of a hammer-headed shark — merely reinforces the combative image. Packer showed by successfully taking on the

For Sir James the essence of capitalism is a constant evolution and revolution as the market’s invisible hand guides money and resources to their most efficient use.

Far from rattling any sabre at the RHM management, he spoke glowingly about the men in charge of his new investment. “It’s basically a well-managed company,” said Sir James. “I think they have done a good job.”

Only two months ago in London, he spoke witheringly about cosy, mutually

cricket establishment in the 70s to launch his World Series Cricket that he is unafraid of a fight.

Yet Rothschild, Goldsmith and Packer appear strange bedfellows. Rothschild, educated at Eton and Oxford, comes from one of Europe’s most distinguished families. But a public and bitter squabble with his cousin Evelyn de Rothschild in 1980 saw him break from the family’s merchant bank N. M. Rothschild to go it alone.

He is intellectual and interested in the arts: for the last four years, Rothschild, now 53, has chaired the Trustees of the National Gallery. Packer, second son of the late Sir Frank Packer, the newspaper man who sold his empire to Rupert Murdoch, enjoys playing the part of the Aussie bruiser. He loves milk shakes, admits a fascination with Genghis Khan and once described being forced to sit through a full-length opera as his idea of purgatory. In the early 19605, a Royal Commission linked

him to organised crime although authorities later decided not to bring charges.

The link in the new, unlikely alliance between European blue-blood and Australian street-fighter is provided by Goldsmith. He is an old friend of both. Like Rothschild, he was educated at Eton. Unlike Rothschild, he was a womaniser and gambler. His first taste of fame came at the age of 20 when he eloped to Scotland with Isabel Patino, a Bolivian tin-mining heiress.

When Goldsmith asked for Isabel’s hand, her Catholic father said: "It is not our habit to marry Jews.” Goldsmith replied: “It is not our habit to marry Red Indians.”

In politics, he has always been of the libertarian Right — despite receiving a knighthood in the notorious Harold Wilson resignation honours — and has fled socialism in Britain and France. He has funded libel claims by those he sees as victims of leftist press influence. His most notable campaign was against “Private Eye.” But above all, James Goldsmith’s life has been devoted to making money. He made his first fortune with Cavenham foods in Britain, and two years ago sat astride France’s huge Generale Occidentale (GO) which embraced forestry, retailing, oil and the French magazine “L’Express” — his other publishing venture, “Now!” magazine, having collapsed in 1981 after being ruthlessly teased as "Talbot” by Richard Ingrams’s “Eye.” After switching his business focus to the United States he made a new fortune thought to dwarf the sums accumulated in Europe by raiding undervalued companies.

A few months later, Isabel died in childbirth. Since then, three strands have dominated his life. His personal affairs have been complicated: he has been married three times, openly maintaining lover and family in one country and a wife and family in another.