THE final And Finally of the year is devoted to the men, women and corporate bodies, without whom this column would not have been possible. They are the business figures who make the money and the mistakes that keep us writing — and hopefully, you reading.
The Final And Finally of the Year awards go to . . .
- The “Of course I knew that” Award: Ryanair and Michael O’Leary. To succeed in taking over Aer Lingus, O’Leary had to win over the employee share ownership trust (Esot). He said so much himself. So he offers cash. But Michael, if the staff take cash, it will trigger a huge tax liability. That is why the shares are in a trust. Of course, he knew that.
O’Leary went on the telly to say how much money the staff will make. But their profit would not be so large because the Esot borrowed a lot of money to buy those shares and would have to pay it back if they sold them. But, he knew that.
Ryanair then invoked the powers of the European Commission to assess the takeover. After a quick glance, the EU has already expressed its concern about competition implications and wants to examine the bid further. It is sure to find that Ryanair and Aer Lingus have an unholy stranglehold over peak morning slots at Dublin. Isn’t that like inviting Herod into the crib?
For our unshakeable belief in the man, we pray it was all a ruse. His infallibility is the touchstone of our faith. O’Leary only ever wanted a blocking stake. Of course, we knew all that.
- Emperor Nero Award: Oisin Fanning of Smart Telecom. For taking RTE to court over a sponsorship deal for the television weather at a time when the company was shipping cash. Not reckless, we stress, just not, well, smart.
“Given the frequency with which the weather forecast predicts dreary wet weather, the enthusiasm of commercial enterprises to sponsor it may come as a surprise,” noted Justice Peter Kelly at the start of the judgment in the case.
It transpired Fanning was prepared to pay at least 5% more than any other bid or more than €1.6m a year for the sponsorship. RTE threw out the “referential bid” and gave the sponsorship to Glanbia. Smart unsuccessfully sued RTE, the first reverse in a bad year at the courts for Fanning.
The same judge was reacquainted with Smart some months later, when the company sued ComReg for withdrawing a mobile-phone licence. “Overall, I get the impression that Smart is a company whose ambitions outstripped its abilities,” said the judge. How right he was. On top of its other woes, losing the ComReg case cost Smart €1m in legal fees.
Killeen Castle is the five-star turn
Big Revolving Door Award: Wall Street’s Big Swinging Richards are out, the big revolving doors are in. There can hardly be a builder worthy of the name without a posh hotel and a penchant for shiny chandeliers. Bernard McNamara’s overruns at the Shelbourne are impressive. Johnny “Kubla Khan” Ronan will next year open his 203-bedroom Xanadu masquerading as the Ritz-Carlton at Powerscourt, Co Wicklow.
We reckon that Joe O’Reilly is spending the gross domestic product of a small African nation, or perhaps two, on Killeen Castle in Co Meath and therefore we plump for the Longford man. His palace doesn’t open until 2008.
Soon it will be easier to find a five-star hotel in rural Ireland than a bed and breakfast.
- The QuickVue Pregnancy Test award: The kit goes to Bill Prasifka and the Competition Authority. The authority embarrassingly passed the Statoil-Shell merger “on the nod” when it failed to issue a determination in time. It simply got its dates wrong.
Poor “Competition Bill”. His first year in the job had gone so well, with the authority securing the first conviction anywhere in Europe for its investigations into a cartel in the home-heating business west of the Shannon. To muck up in the very same sector was almost Shakespearian in its sense of tragedy.
South Wharf glass more than half full
The Ugly Duckling Award: South Wharf. In December 2002, Ardagh plc split into a private glass manufacturer and a public glass distributor. Whatever possessed British venture capital company HgCapital to sell its shares in the Ardagh glass manufacturing company and yet stay invested in the seemingly worthless glass distribution and docklands warehousing spin-off, later to be renamed South Wharf?
Frankly, the decision made absolutely no sense, as South Wharf did not even own the old glass factory building.
When it was discovered that South Wharf could exploit a loophole in planning laws to sell the old Ardagh Ringsend factory to property developers, Hg hit pay dirt. What remarkable good fortune.
South Wharf is now being sold, and the the booty from the glass factory sale shared out among shareholders. For its incredible prescience, Hg scooped an enormous profit of €82m, or a 700% return on its South Wharf shares in four years.
Some swan.
- The Jordan What’s in a Name Award: Tonight you can watch the Leinster rugby team sponsored by Bank of Scotland in the Magners League. Or is that the Halifax-sponsored Leinster team in the Bulmers League? As a director of Bank of Scotland (Ireland) and C&C, could Maurice Pratt please sort out this dual-branding strategy. It’s wrecking the goys’ heads.
Myhome as safe as houses, or is it?
‘You paid how much?’ award: There were lots of candidates for this gong in the property game but the title goes to The Irish Times, which paid €50m for myhome.ie. IT boss Maeve Donovan bought myhome.ie safe in the knowledge that if the acquisition flops, she shall never be allowed to forget it. Equally, if somebody else bought it and Donovan: acquisition it flew, well . . .
As the biggest seller of print property advertising, The Irish Times could not afford to pass on myhome. Defensively sound, the big question is what the newspaper can do with the site.
In America, Zillow.com, the property website started by Expedia founder Richard Barton, plans to allow buyers to sell their houses online and bypass estate agents. This is the internet at its disruptive best. Of course, those same agents would be myhome and The Irish Times’s main source of property advertising income. Kind of scary.
