Saturday 25 February 2017

Raiders of the lost ark

Takeover offer for Oglesby & Butler is just latest episode in remarkable career of cinema owners

His takeover offer for engineering firm Oglesby & Butler is merely the latest episode in the remarkable seven-decade business career of Kevin Anderson and his half-brother Leo Ward, cinema owners and corporate raiders extraordinaire.

On Tuesday, Oglesby & Butler, the Carlow-based engineering company, announced that Kevin Anderson's shareholding in the firm had exceeded 30pc and that he would have to make an offer for the company's remaining shares at a price of not less than 31 cent per share. Anderson's shareholding in O&B is now just under 49pc.

At 31 cent, Anderson would have to pay at least another €1.95m to purchase the 51pc of O&B he doesn't already own.

That someone has finally come along and made an offer for O&B hardly comes as much of a surprise. Its shares were first floated on the stock exchange's old smaller companies market (SMC) as long ago as 1986. The SCM has long since come and gone but O&B remains.

Not, it seems, for much longer. Despite recent strong revenue growth and Anderson's share purchases, O&B still has a market value of just €3.5m.

Anomaly

Having failed to use the currency represented by its stock exchange-traded shares to grow the business, its survival as a quoted company for almost a quarter of a century has always been something of an anomaly.

What is a surprise is the identity of the person making the offer. At a time when most of his surviving contemporaries are either searching for their false teeth or wondering when their next cup of Complan is going to come, the 95-year old Anderson is busy masterminding a corporate takeover.

This easily makes Anderson the oldest corporate raider in Ireland, and perhaps the world.

So just who is Kevin Anderson? Kevin Anderson was born in Dublin in 1915, while his half-brother Leo Ward was born just four years later in 1919.

Kevin became an accountant, which, allied to his acute natural intelligence, gave him the formidable forensic skills he is still putting to such good use almost 80 years later, while Leo, a talented soccer player, signed for Manchester City in 1937.

The outbreak of war interrupted Leo's career in the English top-flight and he returned to Ireland in 1939 and re-signed for Drumcondra, then one of the leading clubs in the League of Ireland.

With Irish domestic soccer now largely reduced to the status of a participatory rather than a spectator sport, it is difficult to realise just how popular the League of Ireland was in the early and mid-20th century, with major clubs such as Drumcondra regularly attracting crowds of 30,000 or more to their home games.

Leo played for Drums until 1949, declining an offer to return to Manchester City after the end of the war in 1945.

He was granted a testimonial game in his final season from which he raised £500, an insignificant sum now but the equivalent of a year's wages for many people in the late 1940s.

It was on such improbable foundations that an empire was built.

Retirement

Soon after his retirement, Ward picked up the distribution rights to a long-forgotten film 'The Hills of Donegal' and attempted, without success, to sell it to the Dublin cinemas.

Undaunted, he headed south to Cork where he enjoyed greater success. The cinema audiences in Cork loved it and he was then able to sell it to the Dublin cinemas for a multiple of his original asking price.

In 1949, the two half-brothers teamed up to form Ward Anderson. In the early years, they concentrated on distribution, acquiring the Irish rights to films and then selling them on to cinemas for a profit.

They were obviously successful because by 1956 they had bought their first cinema in Lucan for £18,000.

Over the next 30 years they gradually built up Ward Anderson to become the largest Irish cinema chain.

The biggest problem they faced in the early years was that in the 1950s and 1960s a small number of cinema chains, including the UK giant Rank, controlled the rights to most newly-released -- or as they are known in the movie business 'first-release', films, while smaller independent chains such as Ward Anderson were forced to feed from the 'second-release' scraps.

With the rise of TV during this period, relying on previously-released films for one's audiences was not a recipe for long-term success. It was vital that Ward Anderson found some way of breaking the big chains' monopoly over first-release films.

Cometh the hour, cometh the man. In 1970, Leo Ward travelled to London and secured the Irish rights to the first seven James Bond movies.

He then showed them back-to-back at the Stephen's Green cinema, which Ward Anderson then owned. It was a huge hit with audiences. Ward did the same thing with the Bruce Lee and 'Carry On' films.

This generated the profits that allowed Ward Anderson to break out of the second-release ghetto and compete with the big boys to screen newly-released movies.

So successful was it that by 1983 Ward Anderson was able to purchase Dublin's Savoy cinema, the jewel in Rank's crown, when the UK chain pulled out of Ireland.

Less than three decades after purchasing its first cinema, Ward Anderson had gone from total outsider to being the biggest cinema chain in the country.

Over the past three decades the trend has been increasingly away from traditional city-centre cinemas to suburban multi-screen cinemas. Ward Anderson has been at the forefront of this move to the suburbs, owning the 11-screen Omniplex at Santry, the 12-screen IMC at Dun Laoghaire, and the 3-screen Swan Cinema in Rathmines.

Ward Anderson now operates 156 screens in the Republic and a further 77 in Northern Ireland, giving it more than half of all the screens on the island of Ireland.

With the Irish being the most avid cinema-goers in Europe, Ward Anderson has benefited from the renaissance in cinema attendances in recent years with people in the Republic spending some €150m at the box office in 2009.

Kevin Anderson 'retired' from day-to-day involvement in Ward Anderson in 1995, though he still examines the books regularly, while Leo Ward is still involved with the business, mainly negotiating distribution contracts, reputedly regularly besting some of Hollywood's sharpest deal-makers.

Anderson's semi-retirement from Ward Anderson has allowed him to devote more time to his other main interest, investing in quoted companies.

Over the past four decades he has been a regular fixture on the AGM circuit, striking terror into the hearts of company chairmen with his well-researched questions.

Most dissident shareholders at company meetings consist of chronic attention-seekers, eccentrics and the merely mad. Kevin Anderson is different.

One company adviser who frequently locked horns with him privately reckoned that Anderson was the best analyst of published company accounts he had ever encountered.

If there was a skeleton lurking somewhere in the corporate closet then, as sure as night follows day, Anderson would find it.

Woe betide the company chairman who hadn't his homework done when Anderson rose to ask a question.

While up to now Anderson has been largely content to play the role of dissident shareholder, Oglesby & Butler is the first time he has emerged as a corporate raider.

With Leo Ward and their two sons, Paul Anderson and Paul Ward, running the cinema business, maybe he fancies his chances at running a business himself once again.

Irish Independent

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