Who will pay Edward Bramson’s tab for TGI Fridays bid?

Perhaps Edward Bramson just likes caravan holidays.

 

There are few other obvious reasons why the prominent activist investor is returning for a second bout of City-style pugilism with Electra Private Equity.

 

Electra, the owner of Park Resorts and TGI Fridays, has barely recovered from its bruising (but victorious) encounter with Bramson’s investment vehicle, Sherborne, last year.

 

Little has changed since then. In share price and net asset value terms, Electra has performed well in a buyout sector beset by intense competition for deals.

 

Still, Bramson maintains that there are opportunities for cost-cutting which have been ignored by management. He has the chance – again – to make his case.

 

I understand the EGM he has requisitioned is likely to be held in late October, and that Electra will dismiss his innuendo about a boardroom split by encouraging Kate Barker, a rumoured dissident, to speak for herself.

 

Public equity markets exist in part to enable investors to challenge company directors in the way Bramson is doing.

 

By virtue of his 29 per cent stake in Electra, the outcome is bound to be closer this time.

 

But if he loses again, valid questions will be asked of him. Last year’s battle cost Electra £3m of its shareholders’ money.

 

It should surely be incumbent upon deep-pocketed activists like Sherborne to cover the costs of a campaign if their objectives are rejected by their fellow owners.

 

As financial headlines go, ‘Taxpayer ripped off by buyout barons’ ticks all the boxes.

 

It was a tempting conclusion to draw from confirmation last week that Worldpay was launching a flotation that will propel it straight into the FTSE-100.

 

Cast aside by Royal Bank of Scotland in 2010 under duress from Brussels, the current owners and management have seen handsome gains.

 

Philip Jansen, Worldpay’s chief executive, will, for example see his stake valued at about £50m when the shares start trading next month.

 

His enrichment does not make this a scandal. In fact, Worldpay’s owners have done UK taxpayers a favour. Sources tell me that in the two years prior to its sale by RBS, Worldpay’s pre-tax profits fell by two per cent and five per cent respectively.

 

It was regarded as an irrelevance inside the bulging financial conglomerate that was RBS. Since the sale, it has seen £1bn of capital investment, transforming it into a focused technology player envied by international rivals.

 

Its projected dividend policy as a public company will benefit pension funds which buy shares in the IPO. 

 

And its track record of integrating acquisitions implies that it will pursue deals of its own with the option of using its equity as an M&A currency.

 

Blaming those who executed this transformation is misguided. To find fault, look (again) at those inside RBS whose mismanagement left Worldpay’s potential untapped.

 

There have been plenty of examples of private equity investors in the grip of asset-stripping avarice and short-term opportunism. Worldpay is not one of them.

 

George Osborne has spent this week trying to carve out a bigger slice of China’s import market for UK-based companies.

 

But with Britain likely to miss a £1trillion 2020 export target by some distance, the chancellor would be well-advised to read TheCityUK’s submission into this autumn’s spending review on the flight home.

 

It recommends the maintenance of a global network of Foreign Office posts to deliver trade objectives.

 

Far too often, overseas embassies abdicate any sense of accountability for Britain’s laggardly export performance.