O’Brien’s rather dismissive view of Siteserv ‘process letters’

Cantillon: Bidders were prohibited from meeting with Siteserv officers

Still on Siteserv, Mr Justice Brian Cregan’s draft report quotes Denis O’Brien’s rather dismissive view of “process letters” in a company sale on the flow of information with bidders.

Such letters in this deal – and a confidentiality agreement – meant bidders were prohibited from meeting or communicating with Siteserv officers or employees without prior written consent from Siteserv or its advisers. Still, the draft shows how Siteserv chief Brian Harvey had “numerous meetings, communications and negotiations” directly or indirectly with Mr O’Brien or his adviser which Mr Harvey never disclosed to Siteserv advisers and concealed from them.

This was no big deal for Mr O’Brien, who referred in his evidence to contact Mr Harvey also had with rival bidder Anchorage: “It may seem unusual because the process letter could have said you’re not to have any conversations without advisers there but nobody really pays any attention to that in the real world and that’s not being smart, it just happens that way.”

The judge noted that Mr O’Brien did not appear to have read the confidentiality agreement or process letters, leaving such matters to his adviser. “Mr O’Brien, in his evidence, said that in the real world private equity buyers pay scant attention to requirements such as those set out in the confidentiality agreement and in the process letters about making contact with management.”

The fact that many other bidders made contact with Mr Harvey and suggested management incentive plans appeared to “bear out” Mr O’Brien’s view, but Siteserv’s advisers did not agree with his assessment. “As far as they were concerned, the provisions of the confidentiality agreement and process letters were there to be followed – especially if such discussions had an effect on the sale process.”