£13m payday for ex-pat Val chief as Marriott snaps up hotel chain
FORMER Patisserie Valerie boss Luke Johnson is in line for a £13m payday after Marriott International swooped on luxury resort operator Elegant Hotels.
Mr Johnson owns 12.5pc of Barbados-focused Elegant, which is being snapped up by US business Marriott for £101m in the latest example of a British leisure firm falling into the clutches of an overseas suitor.
The payout will give his finances a significant boost after a brutal year in which cake chain Patisserie Valerie col- lapsed amid fraud allegations. Mr Johnson, who was not involved in the alleged wrongdoing, suffered a loss as high as £183m from the firm’s collapse, as much as two-thirds of his fortune.
Elegant is listed on the Aim junior stock market and runs seven Barbados resorts, charging around £500 a night for a couple on an all-inclusive stay.
Mr Johnson is London-listed Elegant’s biggest investor. Shares in the company soared by more than 50pc as Marriott’s approach was announced and recommended by Elegant’s board.
With a 12.5pc stake, the former Pizza Express and Channel 4 chairman’s stake would be worth £13m – about £4.5m higher than its value at close of business on Thursday. In February 2018, Elegant investors were advised to vote against the reappointment of Mr Johnson to the board amid fears the serial entrepreneur was spreading himself too thinly.
Separately, it was reported that Mr Johnson has revived plans to put unlisted bakery chain Gail’s, which boasts about 50 shops in and around London, up for sale. He is hoping to run an auction next year, Sky News reported.
What a return to form, and not a custard pie in sight. Everyone’s favourite bake-off king, Luke Johnson, has cooked up a multimillion-pound payday after the luxury hotel chain in which he is a major shareholder agreed to a takeover bid from Marriott International.
The offer values Elegant Hotels at £101m, and Johnson’s 12.5pc stake at around £13m. Such a payday might have seemed like pocket change to the entrepreneur not so long ago but the failure of Patisserie Valerie hit Johnson’s bank balance hard. He lost as much as £183m – two-thirds of his net worth – when the chain imploded.
Johnson dusted down his apron pretty quickly though and was soon back writing in his weekly newspaper column about how painful the whole experience was. He couldn’t sleep, struggled to concentrate, stopped exercising, and even considered moving abroad.
Sounding like a curious bystander, Johnson spoke of how it unravelled so quickly. Yet, as executive chairman, he had a hands-on role and knew the business intimately. Were warning signs missed?
One assumes that it was even more horrendous for the thousands of shareholders, suppliers, and employees who were left out of pocket. Pat Val was valued at £450m when it went under but, at the last count, administrators expected to recoup just £17m and it is not known how much of that will eventually be shared out. Creditors didn’t get much of a mention in his “dear me” letter to readers though. Perhaps the cheque will soon be in the post.
Race is on for Eddie Stobart
Who knew driving lorries could be so much fun? All those long journeys and sleeping in lay-bys. Yet, the folk at Eddie Stobart have managed to make haulage sexy with their shiny red and green trucks. It even has a 25,000strong fan club selling merchandise so grown men can dress like their heroes.
Still, they’re in danger of overdoing the excitement up in Carlisle at the minute. In the last two months, an accounting scandal has been uncovered, prompting chief executive Alex Laffey to be dumped by the side of the motorway; the shares were suspended because it was unable to file results; and the company has received three takeover approaches for good measure, the latest from rival logistics outfit Wincanton.
Under normal circumstances, you would be hopeful of a fierce bidding war emerging that might enable long-suffering shareholders to recover some of their losses. The share price has had a rotten run, falling by more than half since the haulier returned to the stock market in early 2017.
Yet, Wincanton is saying very little other than the bare minimum that is required under the City’s strict takeover rules. There was no mention of price and Wincanton now has 28 days to submit a proper offer.
Meanwhile, Dbay, the company’s second-largest shareholder, hitched a ride a month ago, and is still to make a firm bid. In fact, after dithering, it’s been given extra time to review the books and has until the end of the month to come up with something.
Andrew Tinkler, the controversial architect of the Eddie Stobart brand, was a third suitor but he dropped out of the running earlier this month.
All those admirers and not a single genuine proposal. Even if one does emerge what are the chances of it being a knockout bid?
The board is also about to enter crunch talks with lenders over its £155m debt pile. And if that isn’t enough to contend with, the company doesn’t even own the Eddie Stobart brand. Instead, it is licensed from former parent Stobart Group, a deal that ends next year. Investors shouldn’t get their hopes up then. This is classic bottom-fishing territory.
‘He was soon writing about how painful the whole experience had been’