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Progress on the takeover deal on a fine and sunny day with everyone but Peter King as he holds out on his share conversions and the Liberal/SDP Alliance narrowly win the Portsmouth South by-election
Up, breakfast and to Grove House to sort out my papers and prepare for the day. Phone calls first thing to Derek Weatherby to check calculations on share trade-ups for Peter King and Geoff Lynch; Richard James and colleagues to check the latest situation on tax clearances and the sale agreement; and Peter Smith to discuss the timing of contract signature. It seems I am unwise to sign without these section 460 and 88 clearances which have the effect of eliminating risks over artificial transactions (such as the stamp duty mitigation) and also to ensure the capital gains rollover arising from the retention of Kode shares. Also Kode are unwilling to sign a deal including the conditionality unless the condition ends within 14 days and before their Extraordinary General Meeting.
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Three meetings with Peter King unravelling the Kode Service Contract and Share Conversion mess, as I progress the tax clearance problem and keep everyone informed as there is a Sikh massacre in the Golden Temple of Amritsar in India
Up and to breakfast of one of our duck eggs as they are now back together and laying more than we are selling. Then to Grove House, unlocking the gates and unloading my car of papers and files from yesterday. First to talk to Peter King. I explained that mistakes had occurred over his share trade-up terms and a formula had to be agreed which is both fair and reasonable, which the present one is not. Peter reacted particularly badly to the news, as I expected, feeling that Kode was going back on the agreement. However, I explained that the trade-up terms were all subject to my approval and I had to ensure all parties were equally and consistently treated. Then to the telephone and to discuss with Ashursts my tax position. It seems that Section 88 and 460 clearances could be available within two weeks of the four week maximum period and so the takeover agreement and announcements are potentially delayed.
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Off to Swindon on a sunny and warm day, having dealt with errors in the Kode Takeover agreements and Directors’ service contracts, but finding an emerging deal-breaker on Tax Clearances as we draft public statements and railway drivers being sent home for refusing to drive coal trains in the miners’ dispute
Up and to the office at Grove House to unlock the building and wait for the staff to arrive. The builders are continuing to finish the painting of brickwork and sealing of cracks and crevices. Also the roof plates had arrived for bolting to the gable joints. Then on to Little End Road to talk to John Lamb and run through the Director’s agreements and service contracts and, just as well, as there were still a number of errors. In fact the largest was the choice of a 5 for 3 bonus issue (which was too much for capitalisation cover) and the 11 for 10 Kode to Comart exchange as a result (which changed all the benefits and calculations to the executives disfavour.) This plus a number of discrepancies on starting date for service and share numbers led to me taking the lot back for amendment prior to distribution. Further calls to Richard James established that I would be very foolish not to get the tax clearances; and so I left by car for Swindon determined more than ever on management changes.
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Early start on a Fine and Warm Day for London meetings with my solicitors and then Peter Smith of Kode to make progress on the takeover problems so that the deal is still on.
Up and to my normal toast and marmalade, washed down with apple juice for breakfast. A train to London at 8.02am from St Neots station, arriving somewhat early at Ashursts at 9.30am for the 10.00am meeting. Richard James and I were immediately agreed on the approach to take for today’s meeting. No ground to be given on warranties or representations, the insistence upon tax clearances and avoidance of tax warranties, and a strong but private approach to Peter Smith about the composition of the Kode Board of Directors; offering myself as Non-Executive Director or John Lamb, Derek Weatherby and Stephen Day as candidates for strengthening the executive talent.