Somehow, the story of Roger Corbett being worried about what somebody else paid doesn’t exactly ring true, as this story from this morning’s Fairfax press tried to make out.

There’s a strong hint of Roger weeping crocodile tears over the $44.9 million in fees Australian Leisure and Hospitality paid to advisers Goldman Sachs JB Were, Newbridge Capital and Coles Myer/Macquarie.

What our Roger was really saying, and seems more concerned about was that the extra money was paid in a successful takeover defence that forced Woolworths to pay an extra $379 million, and that ALH’s cash reserves were depleted by the $44.9 million.

It’s that $424 million or so paid effectively out of Woolworth’s balance sheet that’s got Roger donning the cape of concern and worrying about the extent of fees paid by a takeover target.

A lower entry price to ALH by $400 million or so would flow to the bottom line at Woolies, improving earnings and of course the value of the shares and options that Roger and his management team own (18.5 million shares issued in the December half alone to managers!).

What Roger really seems to be saying is that the successful defence and higher price paid to ALH shareholders should really not have happened; that he and mate Bruce Mathieson should have been allowed to buy it cheaply.

It’s almost as though he was saying it was somehow a ‘sin’ that Woolworths was forced to pay more when a cheaper deal was almost ‘ordained’ by Roger! What nonsense!

ALH shareholders have no reason to complain, nor should Woolworths, after all it’s a free market and Woolies could have withdrawn at any time if it didn’t like the price.

That it chose to pursue ALH to the end (which should be this week) and yesterday outlined ambitious plans to sell $1 billion more liquor a year as a result, is the real story.

Finally, in the story in the Fairfax press this morning, was there any mention of how much Roger paid Chris Mackay and his loyal troopers at UBS. Did he play hardball and only pay on success?

The money paid out was indeed a bit rich, especially the $17 million in break fees to Newbridge, Coles Myer and Macquarie. That was Macquarie’s second bite at this particular cherry at ALH in a year. In 2003 it snapped up $100 million in more for floating ALH and then organising a nifty preferential subscription rate for itself and some funds.

But to hear Roger Corbett taking the high road on an issue like this is a bit too much!

CRIKEY: We’ve packaged up a list excessive takeover defence fees on the site here: http://www.crikey.com.au/business/2005/03/01-0001.html

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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