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Bond
a Court
landmarks
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Holmes a Court and Bell
This page looks at Robert Holmes a Court, the 1980s corporate
raider who came close to taking over the Herald &
Weekly Times group and BHP (then Australia's largest private
sector enterprise) and whose Bell group was exploited
by Alan Bond following the 1987 Crash.
It covers -
introduction
Holmes a Court is something of a contrast with Bond and
Skase, distinguished by a subtlety and creativity rarely
evident in their careers but an ambition that matched
- if not overtook - that of fellow entrepreneur Rupert
Murdoch, with whom he clashed
on several occasions.
beginnings
Robert Holmes a Court was born in 1937, a relative of
Lord Heytesbury. After studying forestry in New Zealand
he moved to Perth from South Africa in 1961 to study law
at UWA. He formed his own practice in 1967; author Nicholas
Hasluck later became a partner.
Holmes a Court established the beginnings of the Bell
Group through acquisition and turnaround of the ailing
Western Australian Worsted & Woollen Mills (WA Woollen,
later Albany Woollen Mills) in 1970. Acquisition of the
company - which provided a listing on the Perth Stock
Exchange - and investment in new machinery was funded
by Holmes a Court's successful speculation in the stock
market. WA Woollen gained control of a string of small
businesses such as Westate Electrical Industries before
buying the Bell Bros transport and contracting group for
$9.6 million through a reverse takeover of in 1973. Bell
gained control of the Albany Advertiser, Katanning
Great Southern Herald and radio station 6VA in
1973. Bids for companies such as Griffin Coal, Greenbushes
Tin and Emu Wines were unsuccessful but lucrative.
He secured national attention in 1979 through an unsuccessful
bid for the Melbourne-based Ansett Transport Industries
(ATI) conglomerate, defeated by Murdoch and roadfreight
group TNT. Control of ATI delivered a key TEN
television station to Murdoch. Bell walked away with $11
million profit for deployment in future bids. By the end
of 1980 had $100 million in cash and strategic stakes
in range of companies, including 25% of TNT, 11% of Belgian
shipper ABC Containerline and 7% of Elders Goldsborough
Mort. Bell walked away from a $120 million bid for Elders
in 1981 with a $16.5 million profit; Elders subsequently
was absorbed by raider John Elliott's Elders IXL.
the roaring eighties
In 1980 Holmes a Court unsuccessfully bid for the London
Times and launched the Western Mail
newspaper in Perth, challenging the stodgy West Australian
that was then owned by the Herald & Weekly Times (H&WT)
group and later formed the core of WA Newspapers (WAN).
1981 saw him take stakes in Rolls Royce and Rugby Portland
Cement and make an unsuccessful bid for control of the
H&WT group.
In 1982, Bell acquired Seven network
affiliate TVW-7 in Perth and Holmes a Court successfully
moved on Lew Grade's moribund Associated
Communications Corporation (ACC), famously but unfairly
characterised as 'sunk by the Titanic' after failure of
would-be blockbuster Raise The Titanic. Bell
disposed of ACC's stake in UK ITV operator Central Independent
Television (acquired by Carlton)
and its travel and music publishing interests (US celebrity
Michael Jackson bought the rights to the Beatles' Northern
Songs copyrights). Bell subsequently acquired a television
station in Adelaide and a handful of radio stations. In
1982 Bell bid for Carlton & United Breweries and Elders
IXL, departing with a profit.
Bell acquired Weeks Petroleum, endowed with a 2.5% royalty
on oil and gas production in Bass Strait by the Esso-BHP
consortium and in 1985 acquired 13% of US mining giant
Asarco, rescued by its Australian associate Mount Isa
Mines (MIM) for $140 million. A bid for local utility
Fremantle Gas & Coke was unsuccessful bid.
Bell's offshoot Bell Resources then made a daring bid
for control of the torpid resources and steelmaking group
BHP, at that time Australia's largest company. BHP was
'rescued' by Elders IXL in 1986: Elders bought 20% of
BHP for $2 billion, BHP bought $1 billion of Elders preference
shares.
Elders was a Melbourne-based conglomerate that began with
jam maker Henry Jones, engulfed agribusiness Elder Smith
Goldsborough Mort and - in tandem with Bond - absorbed
Carlton & United Breweries (Australia's largest brewer)
before taking over UK brewers and Australian wineries.
The deal later resulted in action against Elders executives
by corporate regulators.
In 1986 he served as a 'white knight' in defeating a £1.9
billion hostile bid from Lloyds Bank for competitor Standard
Chartered. 1987 saw Bell buy a stake in Pioneer Concrete,
take control of machinery distributor Waugh & Josephson
and unsuccessfully bid for the Australian H&WT
media group, which fell to Murdoch for $1.8 billion. One
consolation prize was acquisition of the West Australian
and other H&WT operations in WA. Holmes a Court spent
US$800m to buy 9.6% of Texaco's stock, depressed after
litigation by fellow oil giant Pennzoil regarding the
1984 US$10 billion acquisition of Getty Oil Company, and
made a raid on steelmaker USX (which had acquired Marathon
Oil for US$6 billion).
By that time he was one of the most globally feared corporate
raiders, perceived as having the skill to walk away from
an unsuccessful bid with the equivalent of a golden handshake.
His reputation had not been damaged through injudicious
acquisitions funded by junk bonds or a demonstrated inability
to run a large organisation. He public persona was underpinned
by a landmark collection of indigenous art, along with
mogul bibelots such as vintage cars, a tasteful Regents
Park residence in London, Double Island off Queensland's
coast and the Vasse Felix winery.
the Crash
The 1987 Crash, with stock market prices diving 25% in
a day and corporate lenders running for cover (Merrill
Lynch for example withdrew Bell's $1 billion line of credit),
posed difficulties. Bell Group had substantial debts along
with assets that were valuable but not generating commensurate
revenue.
Heytesbury - Holmes a Court's family company - at that
time had 43% of Bell Group. Apart from strategic stakes
in takeover targets (notably Texaco, UK retailer Sears
and UK banks Standard Chartered and Morgan Grenfell) Bell
Group's main asset was a 40% stake in offshoot Bell Resources,
cash-rich as the result of a Court's bids for BHP and
other companies. Bell Resources was not able to buy its
parent; share raids on Bell Resources by Packer,
John Spalvins' Adsteam and Ron Brierley's IEL (arguably
unsuccessful greenmail attempts) meant that Bell couldn't
acquire its subsidiary and thereby access the money.
In what seems to have been a move to regroup rather than
distress Holmes a Court intially disposed of some Perth
property interests and then succumbed to a takeover by
Bond in tandem with the State Government Insurance Commission
(SGIC). Both took a 19.9% stake in Bell Group; Bond was
subsequently forced to bid for other shares and ended
up with 68% of Bell Group. Holmes a Court retained 6%
of Bell Group and had received $340 million from the sales
to SGIC and Bond.
As noted on the preceding page of this profile, Bond Corporation
then transferred over $1 billion from Bell Resources for
its own purposes, a move that initially wasn't disclosed
to the minority shareholders in Bell (indeed in Bond)
and breached the WA company code. Bond disposed of some
assets - for example TVW-7 was sold to Skase's
Qintex - and incorporated the newspaper holdings into
Bond Media.
As the Bond corporate collapse gathered pace Holmes a
Court cultivated his personal interests, including acquisitions
under his Heytesbury companies and a buy-back of Stoll
Moss Theatres. In 1989 Heytesbury for example bought the
Victoria River Downs (VRD) pastoral station and major
Sherwin Pastoral Co cattle stations. He profitably traded
in and out of Jaguar, Christies & New Zealand media
group Wilson & Horton (WH).
Speculation that Holmes a Court was about to rebuild his
public empire coincided with announcement that Bond Corporation
Holdings had made a $980m loss, with lenders moving in
and selling off assets. Elders IXL followed with announcement
of a $1.3 billion loss. Bond Corporation entered a scheme
of arrangement in 1991, with receivers taking charge of
Bell Group and Bell Resources before floating WA
Newspapers as an independent company for about $220
million.
Presumably to the relief of boards and executives in Australia
and overseas, Holmes a Court succumbed to a heart attack
in 1990.
afterlife
Having died intestate, under WA law his estate was divided
equally among his wido Janet and children. In 1991 Heytesbury
bought the John Holland engineering group, later plagued
by cost-overruns and litigation. It rationalised assets
(eg some paintings and the stud at Wallen was sold in
1997).
Peter Holmes a Court enjoyed success with theatrical production
company Back Row Productions, launched in 1992, and went
on to serve as CEO of major pastoralist Australian Agricultural
Company (AACo), in which he took a 9% stake, after selling
his interests in Heytesbury for an estimated $30 million.
AACo had been acquired and spun off by diversified group
Futuris, headed by Robert Holmes a Court's lieutenant
Alan Newman. Perhaps ironically, Futuris absorbed much
of the Elders agribusiness in 1995 as part of that conglomerate's
dismemberment after the relationship with BHP unravelled.
In 1999 Heytesbury sold 70% of John Holland Australia
to competitor Leighton, with the remaining 30% going in
2003. The family's Stoll Moss theatres group, acquired
through the ACC takeover, was sold to Andrew Lloyd Webber
for £87 million in 2001.
In 2004 Peter Holmes a Court resigned as CEO of AACo.
studies
Surprisingly, there has been no full-scale biography of
Holmes a Court. He appears in passing in Trevor Sykes'
The Bold Riders: Behind Australia's Corporate Collapses
(North Sydney: Allen & Unwin 1994), Paul Barry's Going
For Broke: How Bond Got Away With It (Sydney: Bantam
2000), Last of a Kind: The Sinking of Lew Grade
(London: Quartet 1987) by Quentin Falk & Dominic Prince
and in Still Dancing: My Story (London: Collins
1987) by Lew Grade.
Patricia Edgar's Janet Holmes a Court: A Biography
(Sydney: HarperCollins 1999) is recommended. Undaunted
(Sydney: Macmillan 1998) by Ethnee Holmes a Court is his
mother's autobiography. His little-known brother Simon
is the subject of Geoff Elliott's quirky The Other
Brother (North Sydney: Allen & Unwin 2005)
Context is provided by King Icahn: The Biography of
a Renegade Capitalist (New York: Dutton 1993) by
Mark Stevens,
The Predators' Ball: The Inside Story of Drexel Burnham
& the Rise of the Junk Bond Raiders (New York:
Penguin 1989) by Connie Bruck and The New Financial
Capitalists: Kohlberg Kravis Roberts & the Creation
of Corporate Value (Cambridge: Cambridge Uni Press
1998) by George Baker & George Smith. The move against
Ansett features in Ansett: The Collapse (South
Melbourne: Lothian 2002) by Geoff Easdown & Peter
Wilms.
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