The Giles saga

See also: Charterhouse plot to merge Oval and Giles

Ever since Chris Giles declared on the front page of Insurance Times a few months back that he wanted to buy Oval and Jelf, the market has watched and waited in eager anticipation. Either Giles would pull off the deals and mark himself out as a major player in the market or it wouldn’t happen and the reasons why would keep the rumour mills in motion for many weeks to come.

Giles certainly had the funding and determination to make these acquisitions happen. But did the takeover victims have the appetite? This week’s news would suggest that Oval certainly didn’t when asked the question. And Philip Hodson is clear that his empire will remain independent, or at the very least would sit as the dominate party in any deal constructed, with the Oval name taking the lead.

With the market gripped by the economic crisis it has become increasingly noticeable that the expansion plans of consolidators’ have stalled. But over the past week Giles has passed two small acquisitions through its books and the focus of attention has returned to the broking empire ruled by the bullish Scot. Read between the lines of the story and whether it is Giles or Charterhouse leading the negotiations to acquire Oval is a matter of opinion, although Philip Hodson is pretty clear in his statement. Sources close to Giles suggest that it would be Giles leading the audacious bid. Charterhouse will not speak on record to clarify the situation.

However it is understood that the plan would have seen Hodson take the role of chairman in the new structure with Chris Giles retaining his status as chief executive driving operations. But it would have been difficult for Giles to lose the branding of a company built by his father, so perhaps price was not the only stumbling block in this negotiation. How this deal would have worked is anyone’s guess, as the two men are very different personalities too. Also, Giles has just been through a process of restructuring the management of his business by recruiting a host of new senior heads as he positions for future growth.

Another consideration is that Giles will probably want to properly integrate the businesses acquired in a way that his rivals have failed to do. He would want and need the right people around him to make it happen. This kind of merger would have meant a clear single vision being in place and all the problems that such transition entails. So what next for Giles? Will he now be knocking on Alex Alway’s door at Jelf asking similar questions? Alway says not. But until the next time, it is unlikely that the consolidation in this sector is going to go away, even as we enter a period of recession.