Phillip Nelson and a team of Nelson Bakewell directors were left waiting for two hours on 29 April in the Blackfriars offices of their law firm Taylor Wessing for a CBRE delegation that never arrived.
Instead, they received a phone call from CBRE managing director Martin Samworth. Samworth spoke directly with Nelson: the £18m takeover of the privately owned 324-strong company, he said, was off.
His fear that NB would haemorrhage more staff after the takeover and the devastating impact this could have on NB’s clients had blown the deal.
“This wasn’t a macho thing between Phillip and Martin,” said an NB director present at the meeting. “Martin made a very good decision very late.”
Both sides deny that any further negotiation took place over the price, which had already been squeezed by 20% (16 April, p32), from £22m to £18m, after the departure of key NB staff. CBRE also quashed rumours that it asked for redundancies.
Days earlier, CBRE had transferred £18m to Taylor Wessing’s client account.
But Samworth’s unease grew as he worked towards finalising the deal, three months after negotiations began.
“We started to doubt whether we were getting a complete enough picture of what was happening at NB,” said a source close to CBRE. “The situation had been masked. They were trying to calm it down.”
CBRE identified a further 10 members of staff who were leaving the firm after heads of terms were agreed, despite its proposal to pay up to 25 key non-shareholder staff £100,000-£200,000 each in a bid to retain their services. “Those 10 were people who we assumed were coming to CBRE,” the source said. “The firm had become very unstable. There was something seriously wrong.”
One member of staff at NB said that even more departures were imminent. “Around 120 people were going to resign if the deal went ahead,” the source said.
Samworth’s decision to walk away was backed by European chief executive Alan Froggatt.
“The European team was fully delegated to pursue and end discussions,” said CBRE president Brett White, speaking in London on Thursday.
Froggatt said CBRE will announce a number of senior appointments. The first is Andrew Richardson, former Manchester investment director at Knight Frank.
References: EGi News 06/05/05
