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(Continued from overleaf)
First came the Monopolies Commission's report on Lonrho SUITS followed by Lonrho/House of Fraser, Version 1.
The search by Department of Trade & Industry inspector John Griffiths for 'concert parties' in House of Fraser shares ended -- in vain -- last August, while Lonrho/House of Fraser, Version 2, at a cost of £1.25 million to Lonrho, has brought cold comfort to Rowland & Co.
In Rowland's words: 'The report is three years late. This is precisely the verdict the Commission should have reached in 1981.'
It is against this background that Rowland -- deeply resentful of the Government shackles which have been imposed on Lonrho -- is openly demanding a referral of the Al-Fayeds' £615 million offer to Carey Street, the place, I hasten to add, where Le Quesne and his committees dwell on matters of public interest and the like.
As Rowland put it on Friday : 'They must want to know more about this so-called fabulous Pharaoh who hides away in Park Lane before they hand him Harrods. They have been questioning us for the past year.'
There can be little doubt that the Government is concerned, albeit for a variety of reasons. Concern starts with Sir Gordon Borrie, Director General of the Office of Fair Trading [OFT] and stops, like the proverbial buck, with Tebbit. Whether the word 'Harrods' will be whispered into Prime Minister Margaret Thatcher's shell-like ear may well depend on the Sultan of Brunei's whims as to whom to entrust with the several billion dollars worth of deposits at his disposal.
Merchant bankers Kleinwort Benson, advisers to the Al-Fayeds (brothers Mohamed, Ali and Salah) are expected to get into a huddle with Borrie tomorrow.
Lonrho's camp is clearly fearful that any such huddle may coincide with a dawn raid which, given the Alfayed Investment Trust's near 30 per cent stake, could clinch control before Lonrho's scheduled meeting with Tebbit takes place on Tuesday.
On Friday, House of Fraser's shares close at 402p -- after touching 415p -- for a rise of 56p on the week. Any attempts at a dawn raid -- bearing in mind the thin state of the market -- would almost certainly involve the Al-Fayeds paying a substantial premium. This looks strong odds against.
Kleinwort, joined as advisers to the Al-Fayeds last week by their new-found stockbroking associate, Grieveson Grant, hope to produce a formal offer document by Friday. What they will stress at Monday's meeting at the OFT is that the cash, to implement the offer, is at hand.
The OFT's line of questioning, in view of the flak flying around the Al-Fayed's £615 million sortie, will not be so much: Is the cash at hand? But rather: Whence it comes?
'Tiny points to the Sultan as bidder.' Such was the headline in Thursday's London Standard, as Rowland publicly proclaimed that Mohamed Al-Fayed was the personal adviser to the Sultan of Brunei.
But it was Rowland's allegations that the Al-Fayed bid is financed by Brunei funds that shook the City and alarmed Whitehall.
By Thursday evening the Al-Fayeds, along with Kleinwort, declared that they were taking legal advice.
Out from Kleinwort came the message that the Al-Fayed's links with the Sultan of Brunei, reputed to receive more than $3 billion a year in oil revenues, were not in dispute.
Such links were evident when the Sultan of Brunei recently acquired the Dorchester [hotel] in a total package deal estimated at some $85 million.
Rowland's claim on this count is also backed by correspondence. A letter dated 23 August, 1984, signed by the Sultan, starts: 'We wish this letter to be considered as a Power of Attorney to Mr Mohamed Al-Fayed, our personal and official financial adviser....'
Behind the scenes the Al-Fayed camp insist that no third parties are involved, but the official message from Kleinwort's John MacArthur is merely: 'We are satisfied that the funds to implement the offer in full are available to Kleinwort who are making the offer.'
One way or another, the Al-Fayeds' £615 million offer has been backed by House of Fraser board, led by Professor Roland Smith, advisers Warburg's and Cazenove and, on the other side, Kleinwort Benson. But despite this glistening array of talent, pressure for a referral persists.
Teddy Taylor, Conservative MP for Southend East, has tabled a question to be answered by Tebbit tomorrow. Taylor's argument is hardly dissimilar to Rowland's. If Lonrho had to justify that it was acting in the public interest, why not the Al-Fayeds?
Dr Ashraf Marwan, one of the victims of Inspector Griffiths' report, clearly feels that his fellow Egyptians, the Al-Fayeds, should not escape the ordeal he had to endure himself. In his words: 'They hassled me for a year because I owned some shares in House of Fraser. No one asks about the Al-Fayeds. I keep reading about their 'immense wealth' and assets. I would estimate their wealth at around $100 million. Why not double it to $200 million. It is still not much.'
Griffiths said that he could not rely on Marwan's evidence as 'the whole truth'. Rowland, in his evidence to Griffiths, was at his wittiest when it came to Marwan. 'I could have asked Robert Anderson to buy 10 million shares. I could have asked D. K. Ludwig to buy 10 million shares. I could have asked half a dozen or a dozen or dozens of people to buy 100,000 shares in House of Fraser. Why pick on Dr Marwan?'
Equally critical about the Al-Fayed's wealth is Saudi Arabian arms dealer, Adnan Khashoggi -- Mohamed's former brother in law.
The mud flies thick and fast. Lonrho's chairman, Sir Edward du Cann, alleges that after Lonrho bought back into House of Fraser -- following its sale to the Al-Fayeds -- he received a phone call from Mohamed Al-Fayed which contained a number of threats to 'finish' and to 'stop' Marwan and Rowland. Marwan is understood to have promptly complained to the police. The police are not understood to have taken the matter very seriously.
But what chances a higher counter-bid from Lonrho? Rowland's reaction is cautious: 'We have already given undertakings to the Monopolies Commission that we would make an offer to all the shareholders, but we did not specify how much or when.
But would Lonrho offer more than 400p? That is price sensitive, retorts Rowland. But he adds: 'Obviously it would have to be adequate to be attractive to shareholders.'
Speculation over an imminent 'dawn raid' by Lonrho rather than the Al-Fayeds, is described as 'absolute nonsense' by Rowland who is also dismissive of suggestions of a Lonrho-led consortium take-over. 'There never was such a plan, nor will there be'.
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