Main Index

Index to British press articles on the Fayeds' purchase of Harrods

These articles "The bloody Harrods battle" and its front page trail, "Tebbit holds the key", both give a clear warning to the Conservative Government of Margaret Thatcher Mohamed 'Al' Fayed's recent bid for House of Fraser was likely to be based on false statements.  Author Melvyn Marckus quotes prominent Egyptian Dr Ashraf Marwan as estimating their wealth at no more than $100 million, whilst emphasising that Mohamed Al Fayed had recently acted as the financial agent of the fabulously wealthy Sultan of Brunei.
    In the event Fayed acquired control of House of Fraser the next day, Monday 11th.  Despite this new information Conservative Trade Secretary Norman Tebbit waved the deal through just 10 days later without referring it to the Monopolies Commission.

[Front page trail]
The Observer 
Sunday, 10 March 1985

THE FATE of House of Fraser, the proprietors of Harrods, will almost certainly be decided this week.
    Lonrho, led by chief executive Tiny Rowland, wants the £615 million take-over bid launched by the Egyptian Al-Fayed family to be referred to the Monopolies Commission. 
    Lonrho has alleged that the funds which the Al-Fayeds are using to mount the bid stem from the Sultan of Brunei, reputedly the richest man in the world. 
    Lonrho, which has featured in four Government reports during its seven-year battle for control of House of Fraser -- at a cost of some £4 million to shareholders -- insists that the Government should act to prevent an Al-Fayed take-over. 
    In Rowland's words: 'We have spent a great deal of time and money assuring the Government that if we acquired House of Fraser it would be soundly managed in the private sector.  If the Al-Fayeds acquire Harrods -- a national asset -- they will be free to sell it to whomever they choose. 
    'The Alfayed Investment Trust is a private company.  It will not be subject to the regulations governing public companies.  The Al-Fayed family are traders.'
    The latest developments come hard on the heels of the publication of last week's Monopolies Commission report which concluded that a Lonrho take-over would not be expected to act against the public interest. 
    A meeting between Lonrho and Trade & Industry Secretary, Norman Tebbit, is scheduled for Tuesday.
(The bloody Harrods battle, page 31)

[Page 31 article]
The Observer
Sunday, 10 March 1985

THE OUTCOME of the bloodiest corporate war ever waged in the United Kingdom -- the battle for control of House of Fraser, the proprietors of Harrods -- will now be decided by the government.
    The Egyptian Al-Fayed family, which acquired Lonrho's near 30 per cent stake in House of Fraser last November for £138 million, have made their play: a £615 million cash take-over bid worth 400p a share. 
    The deal, which brought a swift recommendation from House of Fraser's board led by Professor Roland Smith, was agreed at a board meeting at the Grosvenor House Hotel on Sunday.
    Four days later, Trade and Industry Secretary, Norman Tebbit, released the Monopolies and Mergers Commission's report, which overturned its 1981 findings and concluded that a Lonrho take-over of House of Fraser would not be expected to be against the public interest. 
    On Tuesday, Tebbit will, presumably, respond to the Commission's latest verdict and officially release Lonrho from its undertakings not to mount a bid for House of Fraser.
    By then the wrath of Lonrho's chief executive Tiny Rowland -- already considerable -- will be fearsome indeed. 
    A seven-year strategy to acquire the House of Fraser (which started with the acquisition of a key stake in the House of Fraser associate company, SUITS) might finally receive a Government go-ahead a little more than a week after a rival deal has already been agreed by House of Fraser's board. 
    It could be argued that the irony of the situation is partly of Lonrho's own making as a result of its decision, last Autumn, to sell its 30 per cent stake -- at a £70 million profit -- to the Al-Fayeds.  Lonrho let it be known at the time that the extension of the Monopolies Commission's deadline was the last bureaucratic straw.  More to the point, Lonrho's directors had to take into account the possibility that Sir Godfray Le Quesne's men at the Monopolies Commission might say yet again what the Commission said in 1981, namely: no dice.  If Le Quesne's committee -- which included Stuart Lyons who lived happily at United Drapery Stores before the company became a 'rights' issue for Hanson Trust -- had vetoed a Lonrho take-over, House of Fraser's shares would inevitably have reacted. 
    The real irony of the Lonrho sale is that it was commercially brilliant, albeit potentially fatal in terms of Lonrho achieving its long-standing take-over objective.
    All of which leaves Lonrho's shareholders four Government reports the wiser and some £4 million the lighter in respect of the resultant legal fees.

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